SHOULD I PUT MY BANK ACCOUNT IN MY CHILD’S NAME?
It might seem like a smart shortcut to avoid probate, but adding your adult children as co-owners to your accounts or real estate is often a massive financial mistake. While it bypasses court, it opens the door to risks that can cost your family far more in the long run.
THE RISKS OF JOINT OWNERSHIP
When you add a child to an account or deed, your assets are no longer just yours. They become "fair game" for your child’s life complications. If your child faces a lawsuit, bankruptcy, or a divorce, your savings or home could be seized or factored into their legal settlements.
THE TAX TRAP
One of the biggest downsides is losing the "Step-Up in Basis."
The Mistake: If you add a child to a deed now, they inherit your original purchase price (carryover basis). If they sell it later, they may owe massive capital gains taxes.
The Solution: If the asset passes through a Trust, the value is "stepped up" to the market value at the time of your death. This can save your heirs tens of thousands in taxes.
WHY A TRUST IS BETTER:
Control: You don’t need your child’s permission to sell or refinance your own home.
Protection: Assets in a trust are generally shielded from a beneficiary’s creditors.
Efficiency: You get the probate-avoidance benefits without the tax and liability nightmares.
“Your attorney can identify the best course of action so you can enjoy your property now, without saddling your children with exorbitant taxes later.”
