POD Is What You Need
Julie says her parents want to put Julie's name on their checking and savings accounts. Are there any negative ramifications to this that Julie might not be thinking about?
QUESTION: Julie in Akron says her parents want to put Julie’s name on their checking and savings accounts. Are there any negative ramifications to this that Julie might not be thinking about?
ANSWER: If either one of you got in any kind of trouble at all on this account, it’s going to drag the other one with you. It’s not necessary. They can do what’s called POD, which is paid on death, and it doesn’t have to be probated. It’s just paid on death. It’s not a hard thing at all, and the money should transfer to you immediately upon you handing them a death certificate. In most states, that works. You could check, and double check with their financial adviser, their estate planner, to be sure that everything’s exactly that way in that state.
I wouldn’t want to be on their account. For instance, if they ran it into overdraft, you’d be liable. Or if you got into a car wreck and got sued, somebody could clean out their account. What happens in one’s life negatively, the other one gets to go with you on these accounts. That’s the downside. I’m not saying any of that’s going to happen with your parents. It’s probably not. But that’s the reason I don’t do it. I’ve seen all those times when it did happen. It just takes the fun out of the whole deal then. I would want to go a different direction.