Many retired and elderly people put their adult children on their checking and savings accounts to help with paying bills and such. If you’re thinking about doing the same, Estate Planning attorney Bill Henry hopes you’ll reconsider. Bill says it’s a bad idea. In this article, he shares three reasons why you should not put an adult child on your bank accounts.
Colorado Estate Planning Attorneys
Our Estate Planning & Elder Law attorneys can help you find a safer alternative to putting your adult child on your financial accounts. We offer a free consultation. Call 303-688-0944 to schedule that meeting, or click here to book the appointment online.
Sometimes Convenience is a Bad Idea
We know it’s convenient to add your adult child to your checking account so they can sign checks and pay bills. But adding your adult son or daughter to the account could lead to problems you likely haven’t thought about. A good attorney will tell you doing this is a terrible idea.
These Problems Could Arise
1. Family Infighting
Let’s say you put your adult daughter’s name on your checking and savings accounts. By placing her on the account, you’ve essentially given her access to all of your money. Even the most compatible siblings may see that move as favoritism. They may even feel they have been disinherited.
2. Your Child is Sued
Let’s stick with the same scenario: you added your adult daughter to your banking accounts. Unbeknownst to you, your daughter is in a bad place financially, and she has creditors calling her night and day demanding payment.
You may not realize it, but when you give your child access to your account, that money is no longer just yours, it’s also hers. You essentially gave your daughter – and her creditors – the gift of your money. In other words, the company or person suing your child now has access to your account to settle your child’s debts.
3. You’re Denied Medicaid
At some point, you may need nursing home care and financial help through Medicaid to pay for it. When you apply for Medicaid, the government will see the bank account arrangement you have with your daughter is essentially a financial gift to her.
The way the government sees it if you have money to give away, you don’t qualify to receive government benefits for a specified period of time.
Here’s the Solution: Power of Attorney
A power of attorney can help you avoid the problems listed above. In Colorado, an estate planning attorney will help you create a general durable power of attorney.
A general durable power of attorney is a financial power of attorney. This power of attorney allows someone else, like an adult child, to do things for you like write checks from your checking account. And it protects you from their creditors and helps reduce your chances of being disqualified from Medicaid if and when you need it.
Get Help with a Power of Attorney
At Robinson & Henry, we have a department of experienced Estate Planning & Elder Law attorneys who can guide you through the in’s and out’s of estate planning; from creating a durable power of attorney to preparing a will.
Save money and avoid family conflict by solving estate planning problems before they occur with the help of a good attorney.
Connect with our Estate Planning Attorneys
Call 303-688-0944 to schedule a free case assessment to talk about what estate planning tools are right for your unique circumstances. If you prefer, you can also set up the meeting online here.