When you add someone to your bank account, that person becomes a joint owner of that account. That means that they share that asset with you. For instance, if you put your child on your bank account, your child’s creditors can use that bank account as an asset. If your child owes money to the IRS, then the IRS can levy that account. If those are the risks, then why would someone add a child to a bank account?
Many people believe that adding their child to their bank account is the only way that child will be able to take care of them if anything happens. However, there are ways to achieve the same result without the unintended consequences. If you want your child to have access to your account and sign on your behalf, then you can create a durable power of attorney. A durable power of attorney gives your child access to your bank account and authority to sign on your behalf. Your child will be able to pay for your bills, deposit money, and withdraw money from that account.
If you have questions about powers of attorney, or want to know if you need one, give us a call!