You can put almost anyone who is eligible to open a bank account as a joint owner of your savings or checking account. The joint owner need not be a relative to be eligible. There are reasons, such as survivorship rights, that highlight the benefits of having your spouse or child as a joint owner. Joint owners automatically become sole owners of the account upon your demise. For the same reasons, business partners are popular choices for joint company accounts.
Joint owners of bank accounts share deposit and withdrawal rights equally. One joint owner can make all of the deposits while the other can make all withdrawals. You could select anyone to be a joint owner, including friends, business partners and spouses. Because joint owners enjoy equal rights, it behooves you to select the other party carefully. Your joint owner should be someone you trust to act responsibly and ethically.
Minor children can be joint owners of bank accounts. If you name a minor child as your joint owner, you, as the adult, will make legal decisions related to the account until the child reaches the age of majority. Your minor joint owner, although unable to sign contracts or agreements by law, retains full withdrawal and survivorship rights for the account balance.
Trustee accounts, wherein you make decisions for the other owner, are often good legal options. Not restricted to minors, trustee accounts permit you to take legal actions for the other account owner. This feature is important if you have an account with another adult. For example, you have an elderly parent who wants you to make financial decisions for his money. A trustee account makes more sense, since you, not the other owner, legally controls the account balance.
Bank joint accounts come with a right of survivorship. Should you or your joint owner die, the surviving party becomes the sole owner. If you do not want your joint owner to have these rights, you must advise your bank of your wishes before you open the account. For example, if you open a joint account with your business partner, but you want the balance to go to one of your legal heirs upon your demise, you must stipulate a beneficiary so your estate will receive the balance.
Both owners have equal rights to the balance in joint accounts. One joint owner can withdraw the entire balance of a joint account, without regard for their contribution to the account balance. For example, if a married couple decides to divorce, one party can withdraw all funds without the other owner's permission or knowledge, even if the withdrawing owner made no deposits to the account. The bank or credit union has no control over or right to refuse such a withdrawal request.
If you are concerned about possible actions of a potential account co-owner, you can add another person as an authorized signer, not a joint owner. This gives you the ability to initiate legal action against the other party should he take irresponsible actions with account funds, something you can't do with a joint owner. Conversely, joint owners have full legal ownership of all account funds, while authorized signers can sign checks or make withdrawals only with your permission, without survivorship rights.
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