It may seem logical that you should add an adult child to your bank account. That way if they need to help you by writing checks in your place they can do so. Truth is, adding an adult child to a bank account can open you and them up to a host of problems. Here are a few of them.

It can be Considered a Gift

Adding your child to your bank account gives them full access to all of the assets in that account. This can be seen by the IRS as a gift. This means that you could be subject to tax penalties levied against the full amount. It can also mean that you are disqualified from applying for Medicaid benefits until the gift penalty period expires. This can be very troublesome if there is a large balance in the bank account.

Liability Issues

If for some reason your adult child gets into financial difficult or is sued, this could put your bank account at risk. Adding someone to the account means that those assets belong to them as well. In a case where a judgment is made seizing assets, your assets could be taken as well; leaving you out in the cold with no assets to speak of. It can be very difficult to prove that the assets are yours.

There is a better option. Contact Stano Law group today to discuss living power of attorney as an alternative.