A joint account with children is not a recommended estate planning tool.
Many times, older adults believe adding one of their children to their checking account is a good strategy. Even though you love and trust your adult children with all your might, avoid the temptation of making a joint account with children.
The preferred method versus a joint account with children
The preferred method to accomplish these goals is using a document called a power of attorney. The rules that govern a power of attorney are found in Minnesota Chapter 523. Also, Minnesota’s form for a short form Power of Attorney can be found here.
Generally, an older adult wants to change their checking account to a joint account with children because:
- Need help paying bills,
- Buy groceries,
- Want to make things easier when they die, or
- Just in case something goes wrong.
Using a document that grants an adult child power of attorney allows them pay your bills, buy things on your behalf, and send out birthday or Christmas gifts.
Yes, a power of attorney can authorize your adult children to accomplish these goals even if you become incapacitated or are unable to communicate on your own behalf.
Reasons a joint account with children is bad
There are two main reasons why a joint account with children is bad:
- Debt collectors wanting money from your children can garnish your account and
- Your adult children can be overwhelmed with poor judgment.
It is my experience folks who create a joint account with children put them in a difficult position of managing your money when you do not necessarily need or want help.
Also, for people who have more than one child and make only one of their children a joint owner, the left out child can feel slighted. Other times, the left out child will view scrutinize transactions and claim fraud.
For these reasons, avoid creating a stressful environment by not making a joint account with children.
Help before creating a Joint Account with Children
Before making a a joint account with children, please contact me for help outlining other options for you consider.