For some people, there comes a time when they want to add someone to their bank account, whether it’s a new spouse or significant other. It’s a relatively painless process, though it is not without its risks.
We’ll be looking at adding someone to your account with a brick-and-mortar bank. The process can vary widely from bank to bank for online-only banks, so if you have an online-only bank, you’ll want to check with them concerning the terms of service.
How to Add Spouse to Bank Account
Of course, it doesn’t have to be a spouse, but for the sake of simplicity, we’ll assume that the person you’re adding is your new husband or wife. After all, about 75 percent of married couples in America share a bank account. Sometimes seniors add younger family members, and sometimes parents add older children for reasons we’ll discuss later.
The steps involved in adding someone are relatively simple. The only real complication is that in our increasingly online world, you’ll both need to go to a branch of your bank physically. Here’s what you need to know:
- Both you and your spouse must be present.
- If there are already multiple people on the account, all of them must be present.
- The spouse must provide two forms of identification (government-issued, like a driver’s license, birth certificate, or social security card).
- The spouse signs a signature card.
- Some accounts allow you to set limits on access granted to the new addition, so if you plan on activating that feature, you’ll need to do it at this time.
Once you’ve added your spouse or significant other to the account, they have access to it, and it has become a joint account.
As mentioned above, a new marriage is not the only reason you might add someone to a joint account. Adding your spouse allows both of you to have equal access to the account, allowing for unfettered ability to deposit and withdraw funds.
However, some older folks choose to add a younger person to their account, often a relative. That relative usually does this so that the younger person can assist with banking and paying bills, although sometimes it’s an attempt to avoid probate in the event of the account holder’s death.
Also, parents sometimes add their children to their accounts. They may do this to help young adult children build their credit.
Adding someone to your account is not the same as, say, adding an authorized user to a credit card account. When you add a spouse or other person, you make them a joint owner with you. In a good relationship with someone you trust, this seems okay.
However, if your joint account bank statement reveals activity indicating that the joint account holder has cleaned out the account, you have little recourse since they have legal access to those funds.
Any overdraft charges are the responsibility of all the joint account holders. If your significant other overdraws the account, both of you are liable for all associated fees. Similarly, any credit issues involved with the joint account will affect the credit of both holders.
This means that if joint account holder A defaults on a debt, creditors who may come after him have legal access to assets in the joint account, even if account holder B is the only one who deposited any funds.
Also, if a person shares a joint account with someone married to another person who then gets a divorce, the joint account exists as an asset in that marriage. The unmarried person, who may have deposited money into that account, will have that money counted as part of the marriage’s assets even though he is not part of the marriage. He could then lose that money in a settlement.
Earlier, we used an example of an older person hoping to avoid probate issues with his bank account in the event of his death. However, this is not how the law works. In the case of the former account holder’s death, the person added to the account becomes the sole owner of that account. This line of succession supersedes any instructions in the will of the deceased.
Unless you completely trust the person you’re considering adding to your account, a joint account may not be best for you. Most married couples have enough faith in each other that a joint account is something of a no-brainer. But since married couples are not the only users of joint accounts, the idea of trust becomes larger.
If the older account holder wants to add a younger person to an account to help with banking and bill-paying, perhaps a Power of Attorney arrangement would work better. This allows the younger person to act as an agent for the account holder, but there are some limits to actions the PoA holder can take.
Some banks allow for a convenience account. This designation means that the added person (who presumably aims to help an older friend or family member with their finances) can write checks on behalf of the account holder, but ownership of the money in the account does not transfer.
In the case of the account holder’s death, the designee for the convenience account loses is access, and the assets in the account are subject to the decedent’s will.
Setting up a trust is another way to transfer funds without adding potential beneficiaries to the bank account. Trusts ensure that assets in them are not subject to court probate. There is also the possibility of structuring the trust so that beneficiaries have access to the funds in the form of structured income.
Frequently Asked Questions
Asking the right questions is vital, so here are some of the more frequently asked questions about joint accounts and adding a spouse or other person to a bank account.
That person has access to the funds. She can make deposits or withdrawals, write checks, use an associated debit card, or even withdraw all the funds. Adding her to the account makes her a joint account holder with equal access to the funds.
Yes. You can add family members, friends, new spouses, and anyone else you can think of, although the risks mentioned above insist on doing so with caution and only after much consideration.
Again, you can put just about anyone on your account, provided they can go with you to a branch of the bank to fill out the signature card. However, since trust is critical, you shouldn’t be considering adding your girlfriend to your account unless you trust her completely. And really, you need to have been dating her for a while, if I may put on my parenting hat for just a moment.
Hopefully, you no longer need to wonder, “Can I add someone to my bank account?” Adding someone to your account has its upsides, and many couples spend years successfully managing their finances with this solution. Adding someone to an account has its risks, though, and other options exist. Depending on what your goals are, you should at least explore other options.