Joint bank accounts provide a simple and convenient means of sharing money with your spouse. They can also help ease the trouble associated when dealing with an account while your spouse is deployed. But, there are also several risks involved when married couples operate their household budget solely out of a joint checking account. Before you give your spouse access to everything in a joint account, you should be aware of some of the potential consequences of that decision.
The Risk Of Only Using A Joint Bank Account
Joint Bank Accounts Provide Unlimited Access
Either spouse listed as an owner on a joint bank account has the right to make unlimited withdrawals from that account no matter who deposited the money into the joint bank account. Each joint can deposit and withdraw money from the account freely without permission or even notification of the other owner. While we all like to think that our spouses have our best interests at heart, many can quickly take advantage of the ease of access to a joint account in times of marital trouble.
Joint Bank Accounts Make You Vulnerable To Lawsuits
A joint bank account makes your money in the account vulnerable to lawsuits from creditors that your spouse did not pay. If your spouse is sued and found at fault or liable for damages, your joint bank account may be used for settlement of the debt even though you may have had nothing to do with the reason for the legal action. It is guilt by association, and the courts will not separate what you think may be yours and what is the spouses in a joint account before seizing it.
Both Parties Are Held Liable For Any Debt On Joint Accounts
The creditors or banks that lent money against a joint bank account do not make a distinction between which party the bank account belongs to. They view a joint bank account as equal to an individual bank account and will try to reclaim the money that they are owed. This can be especially tricky if you or your spouse have an overdraft protection on that account, and it is used. Even if it used without the other spouse’s knowledge, both parties are responsible for the debt despite who actually incurred it. This can also lead to damaging the innocent spouse’s credit score as well. If the debt against the joint bank account is not paid, then negative marks are placed on both party’s credit report.
Joint bank accounts provide military and civilian couples the easy and convenience of having access to money when one of the parties is not available. But, having a joint account opens both individuals up for several different types of risk to their financial help. While most people assume that they will not have difficulties with their spouse properly using a joint account, many find that is simply not the case unfortunately.