What are potential consequences of adding a cosigner to a bank account?

Adding a cosigner to a bank account introduces several implications that can significantly impact the financial situation of both the primary account holder and the cosigner. One of the potential consequences is that the addition of a cosigner may affect eligibility for public benefits and expose the account to potential tax liens.

When funds are combined in an account with a cosigner, the assets may be considered available to the cosigner, which could lead to disqualification from certain need-based public assistance programs, as they assess the financial resources of individuals. Additionally, if the cosigner has outstanding tax liabilities, the government can place tax liens on any accounts where they have ownership or rights, potentially impacting the original account holder.

This contrasts with the idea that the account would be automatically joint, which typically implies shared ownership and access. It is also not accurate that the bank will reduce account fees simply because a cosigner is added, nor is it true that the cosigner would have no rights to the account, as a cosigner generally has certain rights to access and control the account depending on the agreement made with the bank. Understanding these ramifications is crucial for anyone considering adding a cosigner to a bank account, particularly in relation to public benefits and financial liabilities.