Q: Can my bank accounts be liable for my adult child's lawsuit if added?
If I, as the primary account holder, add my adult child to my checking and savings bank accounts, can my accounts be subject to any potential lawsuit issues they may face?
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A:
When you add your adult child to your checking and savings accounts, you're creating joint accounts where both parties have equal legal ownership of the funds. This arrangement means the entire account—not just a portion—could potentially be vulnerable to legal actions against either account holder.
If your adult child faces a lawsuit and loses, creditors or judgment collectors may have the right to access any accounts bearing their name to satisfy the debt. The court typically doesn't consider who contributed what percentage of the money; they simply see your child as having legal access and ownership rights to those funds. This risk exists regardless of who primarily uses or funds the account.
You might consider alternative arrangements that still accomplish your financial goals without creating this exposure. Establishing a limited power of attorney, creating a convenience account (where available), or setting up a trust could potentially provide your child access when needed while offering better protection for your assets. These options vary by state law, so consulting with a financial advisor or attorney who understands your specific situation would be worth the investment before making changes to your accounts.
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