Having a Joint Account With an Adult Child

Having a Joint Account With an Adult Child

In the United States, over five and a half million people suffer from Alzheimer’s disease. As the population ages, more people are expected to suffer from dementia and other cognitive impairments. A joint bank account can come in handy as a means to avoid some of the problems that can come with managing finances when someone is struggling with cognitive impairment. Shared banking accounts can help simplify money management for an adult child and their loved one who is suffering from mild dementia.

Opening a joint bank account with an adult child may seem like a simple money solution for a lot of families; however there are a few pitfalls to consider before taking this step.

Benefits of a Joint Account with Your Adult Child

Opening a joint account with your adult child can be beneficial in many ways. It can help prevent fraud; provide the child with oversight of the parent’s spending; and give early indications of poor judgement. A joint account can also ensure the child is able to cover funeral as well as other end-of-life expenses.

A joint account with an adult child may seem like a simple solution but it may have pitfalls down the road.
A joint bank account with an adult child may seem like a simple solution, but it may have drawbacks

It’s also a simple thing to do. Go to your bank, show identification, and complete the paperwork. Sometimes simple is good; other times it’s not the best solution.

Drawbacks of a Joint Account with Your Adult Child

Joint accounts pass to the surviving owner. Therefore if one person dies, the other will inherit all of the funds in the account. You cannot devise a joint account in your will. This may add complications for your executor or someone else who is handling your will.

Also your child can withdraw funds at any time without notice. If your child has any spending issues for whatever reason; having a joint account is probably not a good idea.

Moreover funds in the joint account with your child are marital property. They could be given to your former in-law as part of the divorce settlement. Lastly, is your child is ever part of a civil lawsuit, the money can be used to pay the plaintiff.

Alternative Options

A durable financial power of attorney will allow your child to assist in the management of your financial affairs. Have the document on file at your local bank beforehand. This makes things easier for your son or daughter when they need to use it.

Also make this account payable on death (POD). This allows you to leave what’s left in the account to one or more beneficiaries. Another solution is not to have a beneficiary under the account and have the funds go to your estate and given to heirs according to your will. Your mileage may vary.


If you’re going to open a joint account with your adult child, don’t put your life savings in the account. Rather two or three months of living expenses.

Overall, I don’t believe joint accounts are the best estate planning solution. They work as intended when there’s only an heir or two, and not a lot of money in the account. If there’s a large amount of funds, and a lot of family members; the more likelihood for an acrimonious result.

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