Joint Accounts Can Offer More Pitfalls Than Practicality
While having joint bank accounts with family members or business associates offers some convenience, a recent article on the website Bankrate.com points out that there are a variety of risks to the practice.
“Most consumers sock away cash into bank accounts, checking, savings, certificates of deposit, to maintain liquidity,” according to the item. “But opening a joint bank account, whether with family members or business associates, has potential pitfalls even as it offers convenience. While pooling your money may imply love or trust, the ramifications of joint accounts can elude both parties.”
“You can have a joint account with anyone in the world, but once we’re jointly on that bank account, once we sign the papers, both of us have 100 percent rights to that account,” the article quotes Sandra M. Radna, a family attorney with Radna and Androsiglio in New York. “In the eyes of the law, you’re equal holders.”
“There is no protection for either party with a joint account,” offered Brent Adams, senior vice president at Private Bank of Buckhead in Atlanta. “There is nothing (the bank) can do to protect either party if the other person comes in and withdraws all the money.”
The article offers this advice from financial advisers:
- Keep minimal amounts of money in joint bank accounts for day-to-day use.
- While they are more common with commercial accounts, set up criteria for account transactions requiring two signatures through the bank.
- Use online banking alerts to monitor account activity.
