This is along the lines of what my understanding is.
From Forbes:
Never Add Your Child's Name To Your Bank Account, Here's Why
Aug 6, 2013 @ 11:11 AM
Parents may unwittingly create problems for themselves and their children by adding a child's name to a bank account.
This is sometimes done so the adult child can write checks on behalf of mom or dad. While adding a child’s name seems like a harmless, familial gesture of love and trust, the financial consequences can be extremely negative to both parent and child.
Here is an example to illustrate why you shouldn’t add your child to your accounts. June, a 65-year-old widow, wants to add her 35-year-old son, Henry, to a $400,000 bank account in her name. June prefers to bypass her daughter, Matilda, since she sees Henry as more organized and better able to issue checks to keep her bills in order while she is sick or away in Florida for long stretches.
Even if Henry is as responsible as his mother thinks he is, there can be some unintended consequences June could encounter by adding his name to her bank account.
Gift Taxes Adding Henry’s name with rights of survivorship means Henry is entitled to all the same rights and responsibilities as June. June never intended to make this account a gift to Henry but the IRS doesn't agree. This may trigger gift taxes or at least require June to file forms with the IRS to alert them regarding what it sees as her gift to Henry. This year, you can give up to
$14,000to another person without paying gift taxes or notifying the IRS; anything above that is taxable.
Shared Liabilities: If Henry has some issues with a creditor and a judgment is levied against him, the entire $400,000 bank account could be garnished, even though June is co-owner and she was not involved in any way.
Trust and Responsibility Can Go Wrong: Henry can withdraw the entire $400,000 at any time for his own use, and he is not required to pay it back. If Henry is careless with these funds and uses them imprudently, the entire account could evaporate, leaving June empty-handed.
Divorce: Henry is separated from his wife and they are likely to divorce. Henry’s wife is now entitled to a portion of this jointly held account when their assets are divided up. (This is upsetting to June also because she is on poor terms with Henry’s soon-to-be-ex-wife.)
Legal Judgments Against a Child: If Henry accidentally rear-ends a school bus and becomes involved in a lawsuit, subsequent claims and judgments involving money includes June’s account as part of Henry’s assets. The entire $400,000 could go to the wronged party.
Estate Implications: June has a will that clearly states she wants to divide all her assets equally between Henry and his sister, Matilda. If June dies unexpectedly after Henry’s name is added to her bank account, this rights-of-survivorship joint account bypasses her will entirely. In effect, Henry receives this extra $400,000 inheritance. It’s unlikely this account can be divided after the fact with Matilda. If June has specific trust provisions in her will, her joint account with Henry can undermine the initial intention of her trust.
College Aid: If Henry keeps the account and has a college-aged child of his own, that child is less likely to get good student aid or scholarships because June’s account inflates Henry’s assets.
Adding a child’s name to your bank account is an example of a harmless, well-intentioned gesture that triggers unexpected bad consequences. In seemingly simple situations like these, it pays big-time to consult with your financial planner and your estate attorney before making any decisions.
Another article, from an attorney:
http://www.tn-elderlaw.com/resources/joint-accounts-are-usually-bad
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