Question: I want to add someone to my account at BUYandHOLD. Can I do that? And, if so, how do I do it?

Cynne Lothstein

Answer:

Dear Cynne,

Although you cannot add someone to your account after it has been established, you can open a joint brokerage account with anyone of legal age. Keep in mind that the joint holder has equal rights to buy and sell securities as well as having full access to the funds in the account.  If your original intention was to create a joint account, please be advised that after you have opened the new account, you can transfer your securities into the newly established account, and then close the original account if you were only interested in maintaining one.

Before you decide to open a joint account, however, you should consider the following pros and cons of joint accounts and discuss the matter with your accountant and/or your estate lawyer.

The advantages of a joint account...

The most common form of ownership is joint tenants with right of survivorship (JTWROS). This means that when one co-owner dies, the survivor inherits the entire account.

Joint ownership makes sense when you know for certain that there is only one person whom you want to inherit this particular account. That being the case, upon your death, the assets held as JTWROS will be transferred to the co-owner...and without the expense and often time consuming business of going through probate.

Some concerns...

Obviously setting up a joint account is easy as well as inexpensive. It does not require the services of a lawyer. However, if you and the person with whom you own the account have a falling out, that person will still inherit the account...and this is true no matter what you’ve written in your will.

Another consideration is children. When a joint account is set up with a spouse, you can assume your spouse will take your children into consideration in future estate planning.

However, if you set up a joint account with a second spouse or a partner, that person will inherit the account and biological or adopted would-be heirs from your first marriage will be shut out. If this is the scenario in your situation, you want to make arrangements to protect your children, something an estate lawyer can handle.