2 Reasons To Add Your Adult Kids to Your Bank Account (And Why You Still Shouldn’t)
Written by
Cindy Lamothe
Edited by
Amber Barkley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
There are numerous reasons you’d want to add your adult kids to your bank account — all of which seem reasonable. Ensuring a financial cushion for your loved ones or making financial transactions easier for you as you age seems like a no-brainer.
That said, experts highly advise against it.
“Adding adult children to bank accounts is convenient for managing finances, especially for aging parents,” said Abid Salahi, finance expert and co-founder of Finly Credit Card Finder. “However, this decision carries significant risks that can undermine financial security and family harmony.”
Below are some reasons to add your adult kids to your bank account — and why you still shouldn’t.
Assistance With Bill Payments and Financial Management
One compelling reason parents consider this option, according to Salahi, is to ensure their children can assist with bill payments and financial management in case of incapacity. “Yet, this approach can lead to unintended consequences that may jeopardize the parent’s economic well-being.”
For instance, once an adult child is added as a joint account holder, they gain equal access to the funds.
“This means they can withdraw money without the parent’s consent, potentially draining the account,” Salahi said.
Your Kid Being Trustworthy Doesn’t Make It Less Risky
Moreover, Salahi noted that if the child faces financial difficulties, such as bankruptcy or divorce, creditors may claim the funds in the joint account, putting the parent’s savings at risk.
“A striking example is Mrs. Jenkins, a 78-year-old widow who added her son to her bank account for convenience,” he said. “Unfortunately, when her son’s business failed, his creditors accessed her funds, leading to significant financial distress for both.”
He said this scenario underscores the critical need for parents to consider alternative arrangements, such as establishing a power of attorney (POA).
“A POA allows the child to manage finances without granting them account ownership, protecting the parent’s assets from potential creditors,” he explained.
Help in Case of an Emergency
Many parents think this could be a savvy way to ensure their kids are protected in the case of an emergency, but experts say this still isn’t sufficient reason to add them to your bank account.
“As an attorney who has represented many families in estate planning, I would advise against adding adult children to bank accounts in most cases,” said Cynthia Hernandez, managing attorney for Hernandez Family Law & Mediation.
While parents may want to provide their children access in an emergency or if the parents become incapacitated, she said there are better ways to accomplish this that do not put the funds at risk.
“Joint bank accounts provide the co-owner full access to withdraw funds for any purpose,” she said. “I have seen children empty accounts for reasons unrelated to the parents’ care or withdraw more than necessary for expenses.” She added that once funds are withdrawn, they can be difficult to recover.
Marty Burbank, estate planning attorney and owner of OC Elder Law, has observed the same. “As an estate planning attorney with decades of experience, I have seen the perils of adding adult children to bank accounts.”
While giving children access may seem prudent in case of emergency, he said it often does more harm than good.
“I have had clients whose children emptied accounts for their own use, leaving the parents with little recourse to recover funds,” he said.
Instead, Establish Legal Documents
“Rather than adding children to accounts, I advise establishing legal documents, like powers of attorney and trust agreements, to provide access if needed while maintaining control,” said Burbank.
For smaller amounts, he said limited account access may be an option, but be cautious with more significant funds.
“Proper planning achieves a balance of access and protection,” he said. “My clients have given children limited power over accounts during incapacity but prevented assuming full control or ownership.”
This approach, he explained, provides for children’s well-being without compromising financial security. “There are good reasons to want children’s help, but safeguarding accounts must remain the priority.”
Hernandez advised the same when it comes to setting up legal documents — establish power of attorney, name beneficiaries and create trust documents, so your children can access your funds if needed for your benefit, but they won’t have full access.
For smaller amounts, she agreed that children can be added as account representatives with limited access. “But for primary accounts, especially those with significant funds, full access should only be given cautiously, if at all.”
She acknowledged that you may have good reasons to want your children’s help with your finances as you grow older, “but safeguarding your financial security should remain a top priority.”
Overall, experts noted that with proper legal planning, you can have the best of both worlds — providing access when needed while still maintaining control and protection of your accounts.
More From GOBankingRates
