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Video: Should Your Child Be Your Joint Bank Account Owner?

Should you child be your joint bank account holder?
While it might seem convenient to add your child to your bank account, is it a good idea to have them as a joint bank account owner? Estate planning and probate attorney Sarah Siedentopf has the answer.

Hi, I’m attorney Sarah Siedentopf. I’m an estate planning and probate attorney in Atlanta, Georgia. Should you make your children or a child a joint bank account owner? Often, if you go to the bank, the teller might suggest this because you’re wondering about having someone able to access the bank, help you pay bills, just generally help you, and it seems easy to add the as a joint bank account owner. The answer most of the time, in my opinion, is no.

The problem with this approach is that when you make someone a joint bank account owner they get to use the money themselves if they want to. So, if they go to Vegas, withdraw a bunch of money, it’s not theft because they’re a joint bank account owner. Another issue is that the account doesn’t go through probate, which is great if you’ve maybe just got one child. But if you have multiple children suddenly one child owns this bank account and the other children are out of luck. If the child who owns the bank account wants to share, it’s suddenly a gift from them instead of going through your estate and there could be gift tax issues.

A much better solution, if you’re trying to avoid probate, is a payable on death designation at the end. If what you’re really trying to do is get help with paying bills and doing things, then a financial power of attorney. The financial power of attorney lets them help you access the money and all of these things but there is a fiduciary duty in this case and they have to act in your best interest. So if someone takes out money and goes to Vegas that’s a problem and they have to repay it. The financial power of attorney is a much better way of dealing with this situation, almost all of the time. Now, in an only child situation, there are all sorts of variations so you’ll want to really think this through and maybe get personal advice on it, but I fully believe that the knee-jerk just add one child to the bank account as a joint owner is a terrible idea. So if you need to talk through this and have more questions about this, I’d be happy to talk to you. Thanks.

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