The Hidden Cost of Joint Bank Accounts
Troy C. KieferTroy C. KieferMany parents add an adult child to a bank account for convenience—to help pay bills, manage finances, or make things easier if something happens. While that sounds practical, this simple step can create serious legal and financial problems.
When a child is added as a joint owner, that child becomes a legal co-owner of the funds. That means the money can be treated as the child’s asset as well. If the child faces divorce, debt collection, or bankruptcy, the parents’ funds could be at risk.
The same is true if the parent later applies for Medicaid—because the child’s name is on the account, Medicaid may view the entire balance as belonging to the parent, or consider any withdrawals by the child as gifts, which can delay benefits.
After death, ownership can also create conflict. A joint account usually passes directly to the surviving owner, even if a Will says otherwise. Other heirs may be left out entirely.
Before adding anyone to your account, talk with an elder law attorney. There are safer ways to plan for convenience—without creating unintended consequences.
