My clients often ask whether or not it is a good idea to add their child name to their accounts.  Adding a child as Power of Attorney (POA) on your account, may be useful if there is ever a period of time you are incapacitated.  However, adding a child as co-owner or Payable On Death (POD) beneficiary of your assets could have unintended consequences.

If your intention is to leave your child money to pay for your burial, your funeral and other immediate costs related to your estate, you should keep in mind that a co-owner or POD beneficiary is not legally obligated to pay any of your estate expenses.  In addition, a co-owner could put your asset at risk if the child has creditors or becomes the subject of a bankruptcy proceeding or divorce proceeding.   When adding your child as co-owner of your asset, be careful to avoid any gift tax pitfalls.  This type of asset titling may not be aligned with your estate plan and could be a source of conflict between your beneficiaries.  Transferring assets to your Living Trust may a better choice to provide for efficient administration of your estate.