The Dangers Of Only Using A Joint Bank Account

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.

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Date published: January 21, 2011.

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Hank Coleman is a Major in the U.S. Army and a writer who focuses on personal finance, investing, and retirement. Hank holds a Master’s Degree in Finance and is currently studying to take the Certified Financial Planner exam. He runs the site Money Q&A and his writing has been featured on sites such as The Motley Fool,, and many others. You can follow him on Twitter at @HankColeman.


  1. says

    Is is true that if my (active duty) husband dies while he’s down-range, they freeze his accounts for 30 days, even our joint account? A friend whose husband is deployed told me this. If so, it would seem prudent to be sure I have an emergency fund with only my name on it when he deploys, just in case…

    • says

      Whether or not your husband’s bank account is frozen varies by bank. Some banks may freeze the account if they are notified of a death, some may not. You need to speak with the bank in question to learn their policies and procedures. When a joint account is opened, the account agreement usually includes rights to survivorship. This means that the account automatically passes to the other person with whom the account was shared upon the death of an account holder.

      Whether or not your bank freezes the account or not, you are also covered by Survivor Benefits such as the Death Gratuity that is immediately paid to the next of kin when a servicemember dies in order to cover bills and immediate needs before SGLI can be paid out (SGLI payout is not instantaneous). Remember, your husband’s paycheck will stop the day he dies. The Death Gratuity of $100,000 is a one-time non-taxable payment to help surviving family members deal with the financial hardships that accompany the loss of a servicemember.

      While you should always have an emergency fund for true emergencies such as the car breaking down, etc., you do not have to be concerned about the financial loss immediately after the death of your husband (check certain rules if he is a Reservist or National Guardsman).

  2. says

    Good points, but I think it is a good idea to have one joint account and two individual accounts (one for each of the members in the marriage). That is what my wife and I do. We have both of our paychecks get deposited into “our” account, and then we each take a certain percentage to put into each of our own accounts. Therefore, we have our own individual accounts to spend that money on how we see fit. We don’t get into arguments about having to justify each little purchase. It works well for us. Keep up the great articles.

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