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Are You Worried About Paying Your Bills? A Joint Bank Account May Be a Good Option for You

A Joint Bank Account With Your Adult Child

There may come a time when you feel like you need some extra help getting around to paying your bills and getting everything done financially. Wouldn’t it be great if someone could do it for you from your bank account? Having a joint bank account with your adult child may sound like a good idea, right? Then, they can pay your bills and bring you supplies as needed.

There are some valid reasons why this makes sense, but you should be aware of all the legal implications this signifies. Make sure to weigh all the pros and cons of activating a joint bank account with an adult child and look at other options that may be more suitable for your situation.

Why Create a Joint Bank Account?


Elderly people add their adult children to their bank accounts sometimes as a precautionary measure in case something happens, and they become incapacitated. This can be temporary or permanent. It may also be because they cannot get around to paying their bills like they used to and the child will be allowed to make payments, sign checks and have access to money that is needed to keep things running smoothly.

One of the best positives of having a joint bank account is in the case of death. Typically, assets and bank accounts get frozen throughout the probate process after someone passes. In the case of a joint bank account, only half of the account is inaccessible. This means that the adult child can easily have access to some of the money in order to take care of things.

With this being said, it is important to know that the joint bank account is not a 50/50 deal. Each person signed into the account always has access to 100% of the funds available. Except, as mentioned, in the case of one person’s death. This is why it is important to trust the person you create a joint bank account with.

What to Be Aware of With Joint Bank Accounts

It’s important to know that if one of the people in the joint bank account goes into financial difficulties and creditors come calling, all of the funds in the joint account are up for grabs. Sometimes a divorce or some bad decisions can lead to problems that may impact the elderly parent in a negative way financially.

Another thing to know is that if the parent has split their estate and savings between several of their children in their will, the joint account with the one child will not be divisible nor accessible to the other children in the family. The person who owns the joint bank account possesses the totality of the funds available.

Also, if the child in the joint bank account needs a loan or some financial assistance, the amount accumulated in the joint account may work against them in obtaining the assistance that they need.

The gift tax may apply if the amount in the account is superior to $15,000. Check with the IRS website regarding gift tax laws and how it could affect your tax situation. Be aware that it is not easy to remove a co-owner once the account is set up jointly. Both signatures will be needed to remove one of the account owners.

Other Options to Explore

You have a few options if the possible drawbacks are more important than the convenience of creating a joint bank account. The adult child can create an account and the elderly parent can transfer funds when needed. You can transfer a significant amount as a cushion in case of an emergency or you may transfer only what is needed to pay the bills when necessary.

Another way to give access to a family member is to grant them the power of attorney. A limited power of attorney can sign checks on your behalf and nothing more. A durable power of attorney has access to your account and can write checks and withdraw funds. They have the same privileges as a joint bank account but without officially owning the account. Make sure to hire a qualified attorney to draft this document and explain it in detail to you.

In Review

Most financial advisors will lean towards setting up a power of attorney instead of a joined account with an adult child. But it all comes down to personal family dynamics to determine what is best for you and your situation. Every family is different, and every situation is unique. The last thing you want to create is a conflict between family members. Make sure everything is in order.