Should I add my child’s name to my assets?

This is a question we often hear from clients when  preparing a Will or doing Estate Planning.  Adding names to your assets can have unintended consequences and does not necessarily reduce the Inheritance Tax.  You may want to consider the following before making changes.  

Taking the advice of a bank teller, a recently widowed lady added her adult daughter’s name to a rather sizable certificate of deposit. Shortly thereafter, the daughter suffered a massive heart attack and died, thereby causing the daughter’s half of the certificate to be subjected to Pennsylvania Inheritance Tax.  The widow was forced to pay Pennsylvania Inheritance Tax on her own money because, legally, half of the deposit was no longer “her” money.

This is a true story that illustrates the importance of speaking with an attorney prior to adding names to your assets (deeds, bank accounts, certificates of deposit, etc.).