It is so easy and cheap. “All I need to do is add my kids to my house and bank accounts.” Banks suggest this all the time. Adding a child to your bank account is super easy. It seems logical. But… you just gave your kids all the money in the account. Legally, they are an owner. There is no such thing as “ONLY FOR CONVENIENCE.”
The good part of adding a child on is that it is super convenient.
The bad part of adding a child on is terrible. Your account can be attached by their creditors. This can come as a big surprise. I had a client once who called because money was being taken out of her account, “by the police.” My client has early onset dementia. Her son had not kept current on child support, and the District Attorney had found his name on her account and obtained an order forcing money from that account to pay the child support. Cleaning up this mess was not easy.
Adding a child to your house is harder, but all you need is a deed. Your child now owns your house. Their creditors can file a lien against you. Worse, it could cause your property taxes to increase.
The worst part of adding a child to your assets is that if you have more than one child, you have just given one child a lot and the others very little or nothing. I know your child will promise to share, but they don’t have to. It should not surprise you to hear that often children don’t share when a parent dies. For the children left out, there is no remedy. Their sibling gets to keep everything in their name.
