Kathryn B. Hauer, CERTIFIED FINANCIAL PLANNER (TM)
Hi! Thank you for writing. I so hope that this hasn’t happened to you. Let me define “joint account” and then discuss what that term means for account holders. A joint bank account shared by two or more individuals. Any individual who is a member of the joint account can withdraw from the account and deposit to it. Usually, joint accounts are shared between spouses, close relatives or business partners.
When you are married, a joint account is very handy for managing day-to-day finances. Either of you can deposit to and withdraw from the account. The problem that can crop up with a joint account is when a relationship ends. Either owner can withdraw the money from the account when they want to without getting permission from the other owner. So if a relationship sours, one owner could legally take all the money out. If the account was owned by two married people in the process of getting the divorce, the wronged party could, in preparation for the court date, provide bank statements to show that the money in the account was part of the joint assets that should be included in the settlement. In other cases, you could go to court to show that it was not legal for the joint holder to withdraw the money. However, from the bank’s standpoint, nothing wrong has occurred because the “joint” holders each have complete control over the account and the money in it.
If you are experiencing problems in a relationship with a person who is a joint holder of a bank account with you, it is probably best to have the hard conversation about closing that account and setting up new individual accounts going forward.
Best wishes to you, and I hope things work out ok.
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