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Estate Planning Myths and Mistakes
Let’s talk about joint accounts. Many people think that they can add their child or someone else on a joint account, and everything will be fine. They’ve done their planning. What they don’t know is, on a joint bank account, you’ve given that person complete access to your bank account. They can now go and cash it out if they so choose. You may trust the person, but do you trust their creditor if they had a creditor that you didn’t otherwise know about? Now, that creditor has access to that bank account because they’re a joint holder.
That’s an important thing, and it’s the same thing as, “Oh, we’ll add our kid’s name on to the deed of our house, and it goes to them upon death.” That may be true, but you also made a gift of a certain value of the house to your child, and there could be tax consequences to that which you don’t know about until later in life, or you never know about, and your kids have to fix later on.
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