Advantages and Disadvantages of a Joint Bank Account With a Spouse

One of the main conversations you should have as a couple is how to handle money. While some couples feel that marriage is a partnership in which everything should be shared, including bank accounts, others value autonomy more highly. There are advantages and disadvantages to joint accounts, and there are no hard and fast rules about the best type of account. Whatever works best for both of you as a couple should prevail.

Advantages of Joint Accounts

Joint bank accounts are easy to use because either spouse can access the money at any time to make payments. Even though both of your names are on the account, you don't need written permission from your spouse to access the account. This can be particularly helpful if one spouse is unreachable. Having your assets in one joint account can also make your financial lives simpler, as you do not have to track multiple accounts. A single joint account eliminates the possibility of having too much money in one account and not enough in the other when you need it, reducing the chance of an overdraft.

Disadvantages of Joint Accounts

One of the negatives of a joint account is that you might not always know what is in the account. Since both spouses have unrestricted access to the account, you could end up overdrawn if your spouse makes purchases and fails to tell you. If things turn bad in your relationship, each spouse has the ability to clean out the account and take all the money, even if it was deposited by the other spouse. A joint account also prevents each individual from building up his or her own credit.

Alternatives to Joint Accounts

Separate bank accounts can provide a sense of autonomy that can sometimes be difficult to achieve in marriage. With individual bank accounts, you don't have to feel guilty about spending "your own" money on things you want, like a new pair of shoes. You also don't have to worry about resenting your partner for "taking your money" to buy things.

For some couples, a blend of joint and separate accounts makes sense. In this arrangement, you keep a joint account that you and your spouse use to make joint household payments, such as the mortgage or utility bills. On the side, you each keep a separate account for more personal expenditures, such as clothing or entertainment. One of the negatives of this arrangement is you have to agree on an equitable amount to put in the joint account. If one spouse earns more than the other, this could be a source of conflict.

Estate Planning Considerations

Having a joint account with your spouse can make estate planning easy if you intend to leave all your assets to your spouse. With a joint account, your assets pass automatically to your spouse upon your death, and vice versa. However, this can create a problem if you intend to leave your money to a different beneficiary, such as to a child from a previous marriage. Even if your will directs your money to a specific beneficiary, any assets held jointly will transfer according to the laws of joint tenancy, rather than your will.

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