Why Adding Your Kid(s) to Your Accounts or Deed Might Not Be a Good Idea

When it comes to sorting out your estate, it’s natural to want to make things easy for your kids. In fact, that is probably one of the most important goals that people have with their estate planning regardless of the size of their estate. But before you go ahead and add their names to your bank accounts or the deed(s) to your property(ies), it’s essential to understand the potential downsides. Sure, it might seem convenient, but the risks involved will often times cause more harm than good. Let’s dive into why you might want to think twice before making such a move.

Accidental Disinheritance

You love all your kids equally, right? Adding one child’s name to your assets might unintentionally leave the others out in the cold when it comes to inheritance. Say you add your eldest to your bank account to help with bills. If something happens to you, that account could automatically become theirs, leaving your other children with zilch. Talk about family drama waiting to happen! P.S. The solution to this problem is NOT to just add all the kids’ names to the accounts since (as we will see below) that just increases the exposure!

Exposing Assets to Trouble

Putting your kids’ names on your stuff doesn’t just make it theirs—it also exposes those assets to their problems. If your child faces financial trouble or gets into a messy divorce, those joint assets could be fair game for creditors or ex-spouses. Suddenly, your hard-earned savings could be wiped out to cover someone else’s mess. Not exactly what you had in mind, right?

Tax Headaches

You might think you’re being savvy by transferring property to your kids while you’re still around. But hold up—that move could come back to bite you at tax time. When you gift property, your kids inherit your original cost basis. That might sound fine until they go to sell it. Suddenly, they could be hit with a hefty capital gains tax bill, and the kids are left thinking…”I thought Mom and Dad said that they took care of everything!”

What You Can Do Instead

So, now that you know the risks, what’s the alternative? Don’t worry; there are plenty of ways to sort out your estate without putting your kids on the hook. Here are a few possibilities:

1. Trust-based planning: Set up a trust to spell out exactly how you want your assets distributed. It gives you control while protecting your stuff from unnecessary court involvement if you become incapacitated.

2. Powers of Attorney: Designate someone you trust to handle your finances if you can’t. No need to hand over ownership—just give them the power to act on your behalf. They won’t need a court to act on your behalf. But, remember, the power of attorney does not remove your decision-making authority in the event that you become incapacitated. So if you want to protect your assets from loss due to you taking actions that you wouldn’t normally take in your right mind, trust-based planning may be needed as well.

3. Update Beneficiaries: Keep your beneficiary designations up to date on things like retirement accounts and life insurance policies. It’s a straightforward way to ensure your assets go where you want them to without all the fuss.

4. Talk About It: Above all, talk to your kids about your plans. Being open and honest about your intentions can prevent misunderstandings and hurt feelings later on. Click here to learn more about talking to family members about estate planning.


In the end, while adding your kids to your accounts or deeds might seem like a quick fix, it’s often more trouble than it’s worth. Accidental disinheritance, legal troubles, and tax headaches are just a few of the potential pitfalls. By exploring other options and having open conversations with your family, you can ensure that your legacy is protected and your wishes are honored. After all, estate planning is all about looking out for your loved ones—even if it means saying no to a seemingly easy solution.