The Dangers of Estate Plan of Collectively Entitling Bank Accounts with a Child
When one is developing an estate plan there is a typical practice that some people take part in. That practice is putting their name on a bank account with their child or what is likewise referred to as having the savings account entitled jointly. There are reasons to title a checking account collectively with a child that would encourage someone that this would be a great idea.
If a child owes loan or has financial obligation, then that child’s financial institutions could connect the debt to the jointly bank account while you are still alive to pay debts that a child may potentially owe.
The child might also empty the account themselves because their name is on the account jointly. A better method to title a bank account is to make a POD (payable on death) designation on the account. A basic resilient power of attorney enables a child to access a bank account in the case of incapacity of a moms and dad without having to jointly title the bank account.
Jointly entitling an account with a child can be an easy and cheap estate plan, however risky.