Adding Someone to Accounts Can Be a Big Mistake

September 14, 2012

H. L. Mencken once said, "For every complex problem there is an answer that is clear, simple and wrong." In our quest for a simple solution to avoid probate, you may hear someone make a suggestion that makes some sense on the surface. But when it comes to estate planning you have to ask yourself why informed people don't take this layperson's advice.
There are those who like to think that the powers that be make things more difficult than they need to be, and perhaps there are cases when this is actually true. However, don't buy into overly simplistic assumptions regarding the transfer of assets to your loved ones after you pass away.
One idea that circulates is the notion that you can simply add someone's name to your bank accounts and tell this individual how you want your resources divided among your heirs after you pass away.
We will just assume for a minute that there is absolutely no chance that this individual that you choose will decide to do anything with the resources of which you would not approve either while you are living or after you pass away. (But of course in reality anything is possible.)
What if this perfectly trustworthy individual was to get into financial trouble or become the target of a lawsuit? As a joint account holder the funds that are in the account are the property of this person and they are subject to attachment. If that person dies before carrying out your wishes, their estate plan (or the government's plan) will determine where your assets will go.
Elder financial abuse has become a big problem in the United States today. Senior citizens are scammed out of billions of dollars annually. What if your co-account holder was to become a victim of financial abuse? You could wake up one morning and find the cupboard bare and there would little you could do about it.
Don't take chances with your financial assets. Perhaps it is time to engage the services of a licensed estate planning attorney who will assist you as you arrange for future asset transfers in a safe and effective manner.

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