Joint bank accounts are generally believed to provide a convenient tool for organizing shared finance and expenses, especially in the case of rental and mortgage payments. Couples, house companions, and even close business partners accept this money management approach. Needless to say, joint bank accounts imply major risks for all stakeholders, which is why they must be built on exceptional mutual trust. At some point, you may even need to find a solicitor experienced in a financial law to help you figure out a misunderstanding with the fellow holders.
Joint bank accounts open free access to a single money repository for two or more people who agree to control the same current account. Certain access possibilities are regulated by the joint account mandate: often, not all parties involved possess the same rights and obligations. Most common ones are account money payments and withdrawals, paying bills and writing cheques. All the account holders are granted debit cards and cheque books, as well as regular reports on the account transactions.
Before pooling your finances together with a presumably trustworthy and responsible individual, consider several vital aspects. First of all, inspect the account mandate in every detail and make sure it offers you the protections needed. Be prepared to zero privacy in your spending, as well as additional responsibility for overdrafts, even though you might not be the debt initiator. Most importantly, think about your credit history: as soon as you become a joint account holder, your credit rating is influenced by the other holders’ ratings, which are now co-scored.
Formally, it is pretty easy to open a joint bank account – the procedure is quite standard: the account holders just need to fill out the application form and submit their personal and contact information. The number of holders is unlimited. Also, the account mandate is to be signed by all account holders after clarifying the following points:
- the possibility of money withdrawals without anyone’s consent
- overdrafts’ management (as a rule, each holder is responsible for full debt coverage in the worst case scenario)
- the conditions of financial collaboration dissolution or conflicts’ handling.
By default, individual holders’ credits are not shared with the other holders, since that might lead to major debt responsibilities. As soon as you wish to change the joint account’s terms or completely cancel the agreement on your side, you are free to cancel the mandate without anyone’s permission (mind that this is possible as long as your mandate allows you to act independently, as a rule, it does).
How to deal with disagreements over the joint bank account
Your first action in case of certain problems with the other account holders must be mandate cancellation. The account will get frozen, meaning that nobody will be authorized to withdraw money until certain decisions are made concerning the money split. If you and your account partners cannot reach a fair agreement, the case will proceed to court. Given such an outcome, it is recommended to seek legal assistance from qualified law expert. To find solicitors in Gloucestershire today it is enough to go to the Internet, but use only trusted websites with up-to-date info like on the Solicitors.Guru.
Actually, court decisions on joint bank account cases may vary from one location to another. Thus, courts in England and Wales consider that the account money equally belongs to all holders independently of the statutory or regular payments each makes. It is only if one of the holders does not pay anything at all into the account, then he or she is not allowed to claim for any sums. However, in the case of married couples or civil partners, things are different.
In Scotland, the number of joint bank accounts court trials is the biggest, which can be explained by the assumptions made about equal access rights for all account holders independently of their actual money contributions and relationship statuses.