Joint Bank Accounts

Do you have a joint bank account with your spouse, parent, or significant other? Do you know what it means to actually own a joint bank account with another person? Joint ownership of a home or of a bank account generally means that each joint owner has an interest in the whole. Thus, if one owner dies, the other owner owns everything automatically -- not just half, but the whole thing.

Beyond this similarity, joint ownership of a bank account is a different animal from joint ownership of a home or other real property. For instance, a joint tenant in real property may not convey the interest of another joint tenant without the other joint tenant's consent, yet a party to a joint bank account may withdraw and dispense all of the cash in the account without the consent of anyone. Moreover, the transfer of ownership from one joint account owner to another is done by a simple bank withdrawal (even through an ATM transaction), unlike the complicated, lengthy process of transferring real estate.

A joint bank account is subject to the provisions of the contract between the bank and its depositors. A party to a joint bank account may withdraw and use all of the funds from that account, and neither the co-owner nor his estate is liable to the other joint depositors for the withdrawn funds. In other words, tomorrow you could open a joint account with your new spouse in which you deposit $1,000 and she deposits $100,000 and the next day you could withdraw $100,999, pay cash for a new BMW, and jet off to Acapulco, and you would not be liable for any illegal conduct as to the use of the joint bank account. You may need legal advice on other grounds, however.

Once the funds are withdrawn by one of the joint owners, that owner becomes the sole possessor of the money. Neither the owner nor his or her beneficiaries are liable to any other joint depositors or their estates. If a joint owner has the right to withdraw money unilaterally, in other words, without the consent of the other joint depositors, Illinois courts will not consider the exercise of that right as wrongful, unauthorized, improper, or unlawful.

You should be sure to read all account agreements with your bank so that you understand the terms under which withdrawals may be made and by whom. You should also have the utmost trust and confidence in any other joint owners before creating such an account.

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