Don’t Put Your Kids Names on Your Accounts
When we tell the crowds at our workshops to refrain from putting their kids’ names on their accounts, there is almost always an audible gasp. Adding your adult children to your accounts seems like the simplest and most effective way to ensure they have access to your money if you suffer an incapacitating illness or injury. However, there are many pitfalls to doing this, and many more advantages of using other estate planning tools instead.
Understanding the Downsides of Putting Your Kid’s Name on Your Accounts
When you add your child’s name as a co-owner of your house, bank account, stocks account, or other accounts, you are also subjecting your assets to their creditors. While this may not seem like an issue if your adult child has good credit and financial standing, life is not always predictable.
What if your child and his or her spouse go through a divorce? Have you considered that your accounts might be subject to their divorce? You could end up splitting your nest egg with your child’s ex-spouse if you are not careful. In addition to divorce, if your child has other creditors (mortgage, credit card debt, or
Why You Should Consider Other Estate Planning Tools Instead
In addition to these major downsides, there are also other reasons to avoid putting your kid’s name on your accounts and use other estate planning tools instead. Powers of attorney, trusts, and other tools offer advantages not available when you just put someone else’s name on an account.
For example, when we put powers of attorney in place during the estate planning process, you can:
- Determine who can control your accounts after you become incapacitated
- Create a durable power of attorney which exists even after your disability
- Choose when someone else can take control, and how they determine if the trigger occurred
- Outline advance directives for health care and create a living will
Similarly, creating a trust has its own advantages not available through other means. Depending on the type of trust, this may include:
- Asset protection from creditors
- Asset protection as a part of Medicaid planning
- Allowing you to put more controls on how the money is spent than a will
- Allowing family members to continue to qualify for some government benefits despite receiving benefits from the trust, which is especially important for families with children who have special needs
A member of the Chesapeake Wills and Trusts team will sit down with you and explain the options that might benefit you and your family most. We will look at your unique situation, and help you address all your concerns about your financial future and the assets you will leave for your heirs.
Write Your Own Rule Book to Retain Control of Your Assets
In our workshops, we often refer to comprehensive estate planning as “writing your own rule book.” When you let us walk you through the estate planning process, you are essentially creating the outline for what will happen as you age and after you pass away.
Instead of following the rules and processes established by the government, you are setting your own rules. This not only helps you maintain control of what happens to your assets, but it also helps your children avoid the guardianship and probates processes and other government headaches.
As a part of writing your own rule book, we will walk you through making decisions that include:
- Who will have control of your assets
- When they will gain control
- What will trigger someone else to take control
- Who will determine if the situation met this trigger
- Who will benefit from your assets after your death
- What they will receive and what they can do with it
- Who can make medical decisions when you are unconscious or otherwise incapacitated
- Who can make decisions about end-of-life care
- Your end-of-life preferences
Call or join us at one of our workshops to learn more about the estate planning process and to get a free consultation about writing your own rule book.
Talk to a Maryland Estate Planning Attorney About Your Needs Today
The Maryland estate planning team from Chesapeake Wills and Trusts can help you explore the alternatives to putting your kids’ names on your accounts. We will explain the pros and cons of your options and put an estate plan in place that protects your assets and ensures your children have access if something happens to you — but without the downsides of putting their names on your account.
Call us today at 410-590-1900 to learn more.
We are professionals in asset protection. Don’t leave your future up to chance. Call us today to set up a consultation about asset protection and what you can do to protect you and your future beneficiaries.