Should I put my daughter’s name on my checking account?

It is unclear from your question as to whether your daughter is proposing that you add her as a joint owner of your account, or whether she is suggesting that you open a convenience account, whereby you authorize her to just write checks from your account.  

Although Maryland law permits convenience accounts to be established, not all banks are willing to offer such a convenience. You need to inquire with the bank where you have an account established to ascertain whether they offer convenience accounts. If not, and you prefer such an arrangement, maybe it is time for you to look for another bank.

If on the other hand, your daughter is suggesting that you add her as a joint owner of your account, you will be granting ownership of the money in that account to her.  That is, as a joint owner, your daughter would have the legal right to withdraw all of the money in that account, and if she were to file a petition for bankruptcy or become involved in a divorce, the joint account would be subject to the claims of her creditors and spouse.

Although I generally counsel people against putting someone else's name on their bank account, under some circumstances, joint accounts are useful. For example I have found when handling the administration of probate estates that it is less stressful for a personal representative to pay probate fees and unpaid funeral, cremation, and burial expenses, which usually require payment shortly after death, if they have access to money held in a joint account.

If you decide that you prefer to name your daughter as a joint owner of your bank account however, it is important that you evaluate the likelihood of her becoming involved in a divorce or bankruptcy, or creditor’s claim, and more importantly that you trust that she will spend the money in the joint account for your benefit during your lifetime, and upon your death she will use the money to pay probate fees and other expenses, and not for her own benefit, as she would be entitled to do so under the law as a joint owner of the account. Additionally, federal gift tax rules must be complied with when you add your daughter as a joint owner of your bank account.


Published in the Winter 2011 issue of “Outlook By The Bay” magazine (December 26, 2011)