Thinking of Adding Your Child to Your Bank Account? Just Don’t Do It.
Adding your child to your bank account seems like common sense so they can help with paying bills. This is convenient, but what people often don’t realize is that the child will have more authority than to just sign checks. Adding your child to your bank account means that they legally own half of the account and that they will eventually own 100% of it when you pass away. This not only causes problems within families, but it is a hotly litigated issue. Any Framingham estate planning attorney will tell you that Massachusetts courts are filled with cases of heirs contesting the joint ownership of accounts and fighting to make the funds part of the overall estate.
In these cases, the court has to decide what the original account owner’s intent was when they opened the joint account or added an additional signer. On one side, you have the heirs arguing that the balance of the account belongs to the estate. On the other, the co-owner of the account claims right of survivorship and that no funds belong to the estate.
The most common rule applied is that, absent clear and convincing evidence to the contrary, the joint account balance belongs to the survivor. In order to overcome that presumption, the court will examine any evidence brought forth by the heirs and beneficiaries. As you can imagine, this is tough evidence to produce.
One way to prevent litigation over joint bank accounts is to memorialize intent. Statements of intention can be included in a will or trust. Strong and clear statements of intent are given considerable weight by the courts. But, it is important to remember that the issue of intent will be applied at the time the account was opened and can’t be changed later.
Another way you can avoid litigation over joint bank accounts is with proper trust funding. We recommend that our clients fund their accounts in the name of their trust. That way, their trustee or co-trustee can pay bills on their behalf.
Another strategy to prevent litigation over joint bank accounts is by using a well-drafted Durable Power of Attorney. This allows another person to access your accounts and to pay bills on your behalf without actually being an owner of the account.
It is easy enough to prevent litigation such as this by working with an experienced estate planning attorney. If you are thinking of adding your child to your bank account, call our Framingham estate planning law firm first at (508) 532-8689 and schedule a consultation. We can help you find the safest way to accomplish your goals and plan for the future.