Many seniors add a family member's name to their bank accounts to give the family access
to the account in case something happens. Joint bank accounts are simple and convenient. However, there
are also risks involved. Before setting up a joint account, you should be aware of the potential consequences.
The Other Joint Account Owner Will Have Unrestricted Access to Your Money
Either party to a joint bank account has the right to make unlimited withdrawals, regardless
of who deposited the money. Each joint owner will be able to withdraw money from the account freely, the other
joint owner's permission.
Unfortunately, some people take advantage of the easy access to money in a joint account.
In fact, in some cases, joint owners who were supposed to be managing an older relative's money have improperly
used the money for their own benefit. While it is possible to take legal action to recover money taken under
these circumstances, it is often very difficult to get the money back.
Your Money Could Get Caught in the Middle of the Other Joint Owner's Legal
Battles
A joint bank account is vulnerable to legal attacks by creditors of either joint owner.
For instance, if a joint bank account owner goes through a divorce, his spouse could claim a right to some of the
funds in the account. Even if the joint owner who deposited all of the money could prove that he contributed all
of the funds to the account, he might have to go to court to stop the spouse from getting the money.
The Joint Owner Will Get the Money in the Account When You Die
One of the basic features of a joint account is the "right of survivorship." This means
that the money left in the account after one joint owner dies automatically goes to the surviving joint
owner
Depending on the situation, this can be either an advantage or a disadvantage. Some people want
the other joint owner to the money remaining in the account when they die. In those cases, a joint bank account is
an easy way to bypass the probate process and make sure the intended recipient gets the money right away. However,
if this is not the intent of the person who created the joint account, the joint account may undermine their
Will.
If you are thinking about adding someone to your bank accounts, you should weigh the risks and
benefits carefully. If you want to give someone the authority to manage your money, but you don't intend to
share your money with them, there are better options to meet your needs. Be sure to consult an attorney to
determine which option is the best one for you.
If you are sixty or older, please call the Legal Services for the Elderly statewide Hotline at
1-800-750-5353 for free legal information and advice.
September 2008
