2 Reasons to Add Your Adult Children to Your Bank Account (and Why You Shouldn’t)

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There are numerous reasons why you might want to add your adult children to your bank account – all of them seem reasonable. Providing your loved ones with a financial cushion or making financial transactions easier for you as you age may seem like a no-brainer.

However, experts strongly advise against it.

“Including adult children in bank accounts is convenient for managing finances, especially for aging parents,” said Abid Salahi, financial expert and co-founder of Finly Credit Card Finder. “However, this decision carries significant risks that can undermine financial security and family harmony.”

Here are some reasons why you should add your adult children to your bank account—and why you shouldn’t.

Support with bill payments and financial management

A key reason parents consider this option, Salahi said, is to ensure their children can help pay bills and manage finances in the event they become incapacitated. “However, this approach can lead to unintended consequences that can jeopardize parents’ economic well-being.”

For example, if an adult child is added as a joint account holder, they will have the same access to the funds.

“This means they can withdraw money without parental consent and potentially empty the account,” Salahi said.

Just because your child is trustworthy doesn’t make the whole thing any less risky

In addition, Salahi pointed out that if the child experiences financial difficulties, such as bankruptcy or divorce, creditors could claim the funds in the joint account, thereby jeopardizing the parents’ savings.

“A striking example is Mrs Jenkins, a 78-year-old widow who, out of convenience, had her son added to her bank account,” he said. “Unfortunately, when her son’s business failed, his creditors seized their funds, causing significant financial hardship for both of them.”

He said this scenario underscores the importance of parents considering alternative arrangements, such as issuing a power of attorney for their children.

“A power of attorney allows the child to manage finances without transferring ownership of the account, thus protecting the parents’ assets from potential creditors,” he explained.

Help in an emergency

Many parents think this is a good way to ensure their children are protected in case of an emergency, but experts say this is not a sufficient reason to add them to the 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 at Hernandez Family Law & Mediation.

While parents may want to provide their children with access in the event of an emergency or incapacity, there are better ways to accomplish this without compromising resources.

“Joint bank accounts give the joint owner unrestricted access to funds for any purpose,” she said. “I have seen children empty accounts for reasons unrelated to parental care or withdraw more money than was necessary for their expenses.” She added that it can be difficult to get funds back once withdrawn.

Marty Burbank, estate planning attorney and owner of OC Elder Law, has also observed this. “As an estate planning attorney with decades of experience, I have seen the dangers associated with putting adult children on bank accounts.”

While it may seem sensible to give children access in an emergency, it often does more harm than good, he said.

“I’ve had clients whose children have emptied their accounts for their own purposes, leaving the parents with little chance of getting the money back,” he said.

Create legal documents instead

“Instead of adding children to accounts, I recommend creating legal documents such as powers of attorney and trusts to provide access when needed while maintaining control,” Burbank said.

He said that for smaller amounts, restricted account access may be an option, but caution should be exercised for larger amounts.

“Proper planning achieves a balance between access and protection,” he said. “My clients have given their children limited power over accounts while they are incapacitated, but denied them complete control or ownership.”

This approach, he explained, ensures the well-being of children without compromising financial security. “There are good reasons to want to help children, but securing accounts must remain a priority.”

Hernandez advises the same thing when it comes to creating legal documents: Grant power of attorney, name beneficiaries and create trust documents so your children can access your money for your benefit if needed, but do not have complete access.

For smaller amounts, she agreed that children can be added as authorized representatives with limited access. “But for primary accounts, especially those with significant balances, full access should be granted with caution, if at all.”

She acknowledged that there may be good reasons for asking one’s children to help one cope with finances in old age, “but maintaining one’s own financial security should remain the top priority.”

Overall, experts point out that with proper legal planning, you can get the best of both worlds: You can grant access when needed while maintaining control and protection of your accounts.

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