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Mistakes to Avoid- Child Named as a Co-Owner

Beneficiary designations, account titling (ownership arrangements), and traditional estate planning tools (trusts and last wills) work together to create a fully functioning estate plan. Another common mistake made with beneficiary designations and ownership arrangements includes adding a child as a Co-Owner of an asset.

As a matter of convenience, parents sometimes add an adult child as the co-owner of his or her bank account. The usual purpose of this arrangement is to permit the child to assist the parent in managing finances, paying checks, etc. Most often, the intent is not, to the exclusion of others, for this child to inherit the entire balance of the account.

When your child becomes a co-owner of your account, half becomes subject to the claims of that child’s creditors. The account could even be considered a matter of equitable distribution within your child’s divorce proceeding.

Over the next several posts we will explore these common mistakes in more detail.

To be continued….
Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.

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