Caution: Adding Other People’s Names To Your Accounts Can Be Dangerous
I recently got a frantic call from a client. The client owed back taxes to the IRS, and the IRS was attempting to levy his bank accounts. As the client had little money in his own accounts, that was not really a problem. The real problem was this: my client’s mother-in-law had put the name of her daughter — my client’s wife — on her accounts. So when the IRS levied my client’s and his wife’s accounts, they levied his mother-in-law’s accounts, also.
Fortunately, we were able to get his mother-in-law’s funds refunded back to her, so their immediate emergency was solved.
MORAL: Be very careful about adding other people’s names to your own assets or accounts. When you do this, you are not only making a gift to them, but you are also making your accounts vulnerable to all of their creditors, if any, including the IRS.