What you should know about opening a joint account

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opening a joint account

opening a joint accountWhen you are in love, it seems as though you can’t wait to merge your finances and move forward with life together. Opening a joint account seems like a reasonable step to take with someone else. However, before you open a joint account with your significant other, you should consider the following:

The other person has access

A joint account is just that: joint. This means that the other person has equal access to the account. There is nothing to prevent your significant other from withdrawing large amounts of money and taking off.

Before you open a joint account, you want to make sure you can trust your partner. If you aren’t sure about whether or not your partner is trustworthy, or if you don’t have some sort of legal tie to at least cushion some of the potentially bad effects, you should think twice.

Your partner can close the account without your consent

Because you have equal access, it means that your partner can close the account without your consent. So, not only does your partner have full access to the money in the account, but he or she can close the account and leave you in a lurch. Trust is essential before you decide to open a joint bank account with anyone.

Do you want to have completely joint finances?

Remember that it doesn’t have to be all or nothing. You can create a joint account for certain expenses, and keep your other finances separate. There might be some expenses, such as insurance costs, housing costs, and groceries that you should share. But if you are more concerned about maintaining control over your own income, having your own account, and then paying into a joint account for shared expenses, can make more sense.

It’s important to note that a joint account is a shared pot of money. While getting married won’t completely protect you from your partner taking off with the money and closing the account, it’s often a good idea to at least have that kind of legal bind before you open a joint account with someone. Even if you open the account for shared expenses, there’s nothing to stop your significant other from taking the money and closing the account — and leaving you stuck.

With a separate/joint setup, at least you limit some of the potential damage. Of course, if you know you can trust your partner, you might be fine with a joint account. My husband and I have completely merged finances, and it hasn’t been a problem (nor do I expect it to be in the future).

What do you think? When do you think it’s a good idea to have a joint account?