RICARDO Williams, head of branches, JN Bank, is advising seniors that while there are several benefits to adding a joint holder to their saving or chequing accounts, it’s vital that they have complete trust in the person they give this privilege.

“They must choose carefully and ensure that it is someone they can trust wholeheartedly. Without trust, a joint account could create more headaches than assistance,” he cautioned.

Williams explained that opening a joint account with a partner or family member typically means that all persons named on the account have equal access to the funds.

“As an owner of the account, both co-owners can deposit and withdraw funds from the account, especially if all parties are issued a debit card or have online access. You most likely want to reserve this for someone with whom you already have a financial relationship, such as a close family member, as this level of access means they can do everything you can do with the account, so be vigilant about who has access,” he advised.

Williams said sharing a joint bank account can provide different benefits for different relationships:

Married couples and domestic partnerships

Couples can pool their resources in a joint account to save money toward a common goal, like a vacation or to purchase a home. They may also find it easier to have a single account into which they can deposit their pay cheques and make payments for their rent or mortgage, bills, or other joint debts.

Parents and children

Joint bank accounts can help parents instil good financial habits in their children. Parents can easily monitor transactions and spending habits with joint savings accounts while teaching children how to save and spend wisely. For those with children away at school, joint bank accounts can help expedite cash transfers for unexpected expenses.

Aging parents and their adult children

Joint accounts can help adult children manage their parents’ finances, including bill payments and medical expenses, even from a distance, as needed. A senior may also find it useful to add one of their children or another authorised user to their accounts to pay bills and do routine banking on their behalf if and when they are not able to do so on their own.

Joint accounts can also protect account holders in the event of death, as the majority are established with “rights of survivorship,” Williams said. When one account holder passes away, this feature allows another joint account holder to retain access to the shared account. Without survivorship rights, legal procedures could restrict access to funds for funeral, estate and other timely expenses.

Business partners

Joint bank accounts make it easy for business owners to share financial responsibilities, such as paying vendors and making incidental purchases like office supplies.

Williams noted that in some instances, certain beneficial features of joint bank accounts could become complicated, particularly because they generally provide all parties unlimited access to the funds. “Thus, if one spouse has difficulty controlling their spending habits, this may affect the other spouse, who may be more frugal. The frugal spouse cannot challenge the withdrawals or transactions of the other spouse with the bank because they are listed as a joint account holder,” he advised. “The same goes for a senior, who decides to add an adult child or family member to their account.”

Another thing to keep in mind with joint accounts, Williams pointed out, is that all parties with access are responsible for all fees and charges. “Therefore, if your husband runs up your joint credit card, you are equally responsible for paying it back. Similarly, if your joint chequing account goes into overdraft, you are both liable for the negative balance.”

The JN Bank manager said it is best for parties to discuss the responsibilities associated with opening a joint account before doing so, to avoid any unnecessary problems or conflicts that may arise.