Do I need to put my children on my checking and / or brokerage accounts?
Kurt R. BachmanKurt R. BachmanThe answer depends on what you are trying to accomplish and why. If your goal is to make it easier for your children at your death, then the answer is “no”. Without losing control by adding your children to the account, non-probate transfers can be easily accomplished with Transfer on Death (“T.O.D.”) beneficiary designations. If your goal is to make it easier for your children to pay bills, etc., during your lifetime; then, the answer is also “no”. Without losing control by adding your children to the account, check writing privileges can be easily accomplished with Powers of Attorney (“P.O.A.”) and / or by granting such authority at your bank or brokerage company. If your goal is to irrevocably transfer ownership and control of the account to your children during your lifetime, then the answer is “yes”. Adding children to your accounts as joint owners (“and” / “or”) can be characterized as a present interest gift to the children, which may expose the account to loss of control and diminution in value due to unforeseen events in the lives of the children (i. e. death, divorce, uninsured losses from accidents or business transactions, etc.). In addition, once you add children as owners you can no longer make changes to the accounts without the written consent of those children. Therefore, you should be cautious when considering adding children to your accounts in lieu of utilizing T.OD.’s or P.O.A.’s, especially if your goals are simply to make it easier for them to access the accounts during your lifetime or at your death. Otherwise, unintended consequences await.
