Joint Bank Accounts
A new marriage generates many symbols of itself. Naturally, some include the wedding ceremony, the honeymoon, the purchase of a new home or rental of an apartment, and the beginning of a family. Perhaps the most practical newlywed symbol is the arrangement of a joint bank account. A joint account is a true indicator of trust between two people. Finances tend to be one of the last things shared by couples, even after living space and biographical details. It may be that acting with caution is a good thing; however, there are also many advantages to joint accounts.
The most basic definition of a joint account is one in which two parties jointly control what goes on with the account. You can arrange the account so that one person can make transactions without the other’s authorization, or else make it so that some require both parties to sign off. If you are still hesitant about giving your partner complete control of your money, you may want to have 2 joint accounts. You can arrange one to have the money for daily and group expenses to which both parties have access. The second account might have your shared savings; however, to withdraw or transfer money would require two signatures.
Joint accounts are not restricted to wives and husbands. Joint accounts can be a good option for committed couples, business partners, and sometimes friends. When such situations arise, it is important to carefully form the parameters of the account. Trust is good, but prudence is best. The versatility of these accounts makes them extremely attractive. Banks typically will allow you to create personal withdrawal limits and form additional parameters to monitor what is being done on each account.
The most important aspect of a joint account you need to know, if you are not familiar with the concept, is that it is a joining with a partner. A partnership requires open channels of communication, honesty and consideration. It is easy to get into financial difficulty if a couple doesn’t communicate clearly about expenses. If this is a problem for you, you might want to have more than one joint account. Each individual can have primary control over the other, with one individual remaining simply as a backup in case of an emergency. As with a recent marriage, it will take some time to figure out the best options for you.
Of course, it’s important to use caution when thinking about opening joint accounts. This is especially true when there is no commitment to a marriage or a business in place. One example of this would be if you opened an account with an individual, added money to the account, and then the other person took the money and ran off. You wouldn’t have any legal recourse in this matter. When money is put into a joint account, all holders on the account own it. In the case of the dissolution of a marriage, the division of the money will be determined by the divorce settlement. In a partnership, legal protections would apply. You will have to fend for yourself, though, in the case of a non-marital relationship or friendship.
Guidelines regarding the fate of the money in the event one of the people passes away can vary from one state to the next. The default is for these funds to become the property of the survivor unless someone contests this claim. A will naming some other benefactor may split the funds between the co-owner and said benefactor.
It is much simpler in a marriage to have joint accounts. However, they do contain certain risks, and should be completely evaluated and understood before making this commitment.
