The Hidden Risks of Using Joint Bank Accounts for Estate Planning

Why adding a child or friend to your account can create more problems than it solves

Many Californians, especially seniors, add an adult child or trusted friend to a bank account—usually with good intentions. It seems “simple,” offers convenience for bill-paying, and feels like an easy way to avoid probate or conservatorship down the road.

But here’s the truth: using joint accounts as an estate planning tool often backfires. And the consequences can be costly, irreversible, and completely unintentional.

Why People Add Others to Their Bank Accounts

The most common reasons for joint accounts in estate and elder planning:

• Convenience — someone can help manage finances during illness or aging

• Avoiding probate — assets pass automatically to the surviving joint owner

• Preventing court conservatorship — allows access without court involvement

• Trust — “I want my daughter to take care of things if something happens to me”

Unfortunately, what looks like a shortcut often becomes a legal and financial trap.

The Three Big Problems with Joint Accounts

1. You Give Full Access and Control — Immediately

Once you add someone as a joint owner, they have the same legal access to the funds as you do. They can withdraw every dollar—even if you never intended that.

Poor judgment, financial stress, divorce, gambling, or even elder financial abuse can drain an account with no legal recourse.

2. Your Money Can Be Taken by Their Creditors

If your joint owner is sued, goes through bankruptcy, divorces, owes the IRS, or gets into debt, your account may be exposed—even if 100% of the money was yours.

You may have to prove in court that the funds belong solely to you. That process is expensive, time-consuming, and emotionally draining.

3. Your Will Cannot Control What Happens to the Money

If an account is titled as joint tenancy with right of survivorship, the surviving owner automatically receives 100% of the funds at death.

That means:

• It does not matter what your will or trust says

• Other children, beneficiaries, or charities get nothing

• You may unintentionally disinherit people you meant to include

Example: You add one child to help “pay bills,” but your intent is to split everything evenly among all children. That account passes to just the one child — legally and completely.

There is no legal obligation for the joint owner to share.

Why This Matters in California (2025 Update)

With probate delays still averaging 12–18 months, many people look for ways to avoid court. But joint accounts are a poor substitute for proper estate planning.

A joint account only avoids probate for that single account and does not provide:

• Health care decision authority

• Financial power-of-attorney protections

• Tax planning or creditor protection

• Control over how assets are distributed after death

• Flexibility for minors, blended families, or special needs beneficiaries

In California, the safer and more complete solution is a revocable living trust-based plan, which allows you to avoid probate, manage incapacity, and control lifetime and post-death distribution of all assets—not just one account.

Better Tools Than Joint Accounts

Goal: Allow someone to manage money while you’re alive
Better Solution: ✅ Durable Power of Attorney

Goal: Avoid probate
Better Solution: ✅ Revocable Living Trust

Goal: Give limited access to accounts
Better Solution: ✅ Agent Authorization (not ownership)

Goal: Protect against creditor risk
Better Solution: ✅ Keep title in your name / trust only

Thinking of Adding Someone to Your Account?
Do This Instead:

• Talk to your estate planning attorney about trust-based planning
• Use agent-specific bank permissions (not joint title)
• Consider payable-on-death (POD) or transfer-on-death (TOD) designations
• Make sure account title matches your trust — this is critical

Bottom Line

Joint bank accounts are not estate plans. They give up control, expose assets to risk, and often create unfair results among beneficiaries.

If you want loved ones to help with finances, inherit assets smoothly, and avoid California probate, the right approach is a properly funded living trust, power of attorney, and health care directive.

Let’s Protect Your Intentions — Not Create Problems

At Nett & Nett, PC, we help clients avoid the costly traps of informal planning. We make sure your accounts, property, and wishes are properly aligned and protected under California law — and that the wrong people won’t inherit the wrong things for the wrong reasons. Schedule a strategy session.

By Kevin P. Nett, Esq., Managing Partner — Law Offices of Nett & Nett, PC
November 2025