Risks Associated with Adding Children to Bank Accounts

My plan is to leave my bank accounts to my children after I pass away. Can’t I simply make them joint owners?

Despite the fact that it sounds good, that idea is not feasible. The only benefit you’d gain would be to avoid court proceedings. However, you would put yourself at risk, at a time when you might need your money. You might be exposed to an impending divorce, bankruptcy, liability for legal actions, or, last but not least, your children could spend your money without your permission.

The best way to resist temptation is to avoid the opportunity in the first place.

Plan for the Future of Your Finances

While you are alive, it is essential to designate a person you trust to pay your bills when you can’t. With our comprehensive power of attorney document, your trusted person can take care of your finances when you aren’t able. Avoid downloadable internet versions. Come see us instead. You don’t want banks and insurance companies rejecting your document as insufficient when you most need it!

Then, for when you pass, make your bank account “payable on death” (POD). You remain sole owner of your account during your lifetime. Then, when the time comes, the POD designation is a simple and no-cost way to leave your money to your heirs.

Just gather your heirs’ contact information, Social Security numbers, and birth dates. Then visit the bank, ask for their POD forms, and fill them in with the people or charities to whom you would like to leave your money. Tell your heirs what you are doing, and where your accounts are located, so they will know to come forward to claim the money at the appropriate time.

Power of Attorney

If your power of attorney is powerful and detailed enough, you can be confident that your trusted person will take care of your finances if you become disabled. For when you pass, you will have your POD in place to transfer your money to your heirs at that time. No fees, no court costs, and your accounts are covered. That’s a much better plan than a joint account.

For help with your planning needs, please give us a call. Please contact us at our Forty Fort Pennsylvania office or give us a call at 570-288-1800. We’d be honored to help make sure your plan is what you want and that it is properly documented.