College Connect: Are joint bank accounts a good idea?

Posted By sabew

Lauren Walsh Life as a Couple

You always hear what’s mine is yours and yours is mine, right? But, should this rule apply to you paycheck once your married?

We know it is very common for married couples to have a joint account because all of their assets become community property once they marry. Still Mark and I wanted to see if it made sense for us.

When Mark and I discussed having joint accounts we talked about the advantages and disadvantages of that financial arrangement. First, what is a joint account we wondered? It is defined as a financial asset that is owned by two people. The account would have both Mark’s and my name on it. Thus, either of us would have access to the account.

Our joint account would essentially hold both our salaries. We would each arrange to have our paychecks directly deposited into the joint account.

This arrangement, we learned, could prove more convenient for us. With a joint account, we could our pay household bills and rent out of one account with just one check instead of trying to split up costs and write separate checks. Another advantage of having our money in a join account is if Mark, let’s say, is out of town (or more likely just not around because of his job), I could still pay bills and generally still take care of business for the family without him.

As sad as it can be to think about, joint accounts are also smart in case one of us dies. If this happened, any money in the account would immediately go to the surviving party. If you have separate accounts, money in the account can does not get caught in the red tape of a probate court. With a joint account, the money automatically becomes the property of the sole survivor, which would be especially important if we have kids.

One challenge of joint accounts is that they require a heightened level of trust. With joint accounts, each party needs to absolutely have confidence in the other person to be responsible and honest.

To the bank, it does not matter at all whose paycheck is bigger or if there is just one paycheck growing the account. All money in a joint account is seen as just that, joint! It is not the bank’s job to keep track of who contributes what. Mark and I would each have equal access and liability.

For instance, if Mark is out writing bad checks around town by law, I will be liable for the returned checks too since my name is also on the account. The same law applies when one half of the joint account owners are overspending or becomes the subject of a lawsuit. Creditors can also confiscate your portion of the money in the account. The law sees no separation of the money

But, what happens if you split up, we wondered? (Not that we would ever hope for that!) We found that your joint account will be broken up in the event of divorce. If divorce were to happen, typically the court divides the money between you two but necessarily equally. One other thing that can happen when a divorce occurs, or is pending, is that one party could drain the joint account, leaving the other party with nothing.

While having a joint account I advantage for everyday use is probably the most logical arrangement for a married couple, it is certainly and important pact that should not be entered into lightly.

I would never get a joint account with someone I thought might take advantage of this set-up But, because Mark is so wonderful, fantastic, trustworthy (I could go on!) he and I will be opening a joint account as soon as we are officially Mr. & Mrs.

Lauren Walsh is a graduate student majoring in strategic communication at the University of Missouri. She’s has a bachelor’s degree in business from Southern Methodist University. She and her fiancé will marry in October 2011.

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