Adding children to title on your accounts and assets

VIDEO TRANSCRIPT:

Hello, everyone. This is Robert Mansour and today I'd like to talk to you about putting your children on your bank accounts, on your real estate, et cetera. A lot of people try to handle their estate planning matters by basically adding children to their account. For example, somebody in their 60s or 70s might add their 30-year-old or 40-year-old daughter or son onto a bank account, an investment account, or sometimes they'll put the children on the real estate, on title with them. The thinking behind that is, well, with respect to bank accounts, they figure, well, this way the child can write checks, the child can make withdrawals, make deposits, et cetera.

The problem with that is that whenever you add a child to a bank account or an investment account or real estate. You have effectively added a bull's eye to that asset. How does that work? Let's say that son or daughter gets in any kind of trouble. Let's say they're going through a divorce. If they're going through a divorce, it is conceivable that the attorney for the soon-to-be ex spouse decides that they want a piece of that account, or they want a piece of that investment, or they want a piece of that real estate. The next thing you know, you're owning that asset with an ex son-in-law or an ex daughter-in-law, or you have to give them a portion of that.

Why? Because your son or your daughter is on the account. That means that they own the account, just like you. Let's say they get into some kind of creditor problems or a bankruptcy or a law suit. They're driving down the street one day and they hit a little boy on a bicycle. The next thing you know, that little boy's family is coming after your son or daughter, and everything with their name on it, including your asset. Sometimes you have to ask yourself, "Am I creating more trouble by adding somebody to my account?" There are other ways of handling this, and there's other avenues that you can pursue with a proper estate plan. Sit down with an attorney and come up with a plan that protects you, but also allows your children the tools, or gives them the tools, rather, to assist you if they have to. This is Robert Mansour, thank you for watching.