If you have multiple marital bank accounts, who is allowed to access what accounts might be confusing. Depending on the type of savings account you have, you might have complete control over your account — or you could be completely vulnerable to being swindled. It all depends on what kind of savings account you have.
A bank account is usually classified as either an individual or joint account. An individual account is owned by one person. A joint account is owned by two or more people, usually partners.
“Legally, a spouse can’t access your personal savings account without permission,” said Scott Trout, CEO of national domestic litigation firm Cordell & Cordell, headquartered in St. Louis. “The only person permitted access to the funds on deposit is the person who is authorized to sign on the account.
Read on to get a better understand the rules around spousal access to savings accounts.
Find out if you have an individual account by asking your bank. If you’re the account’s only authorized signatory, then you’ve got an individual account and it’s likely you’re the only one who can access it during your lifetime. Similarly, if your spouse has separate accounts in his name only, you don’t have any rights to those bank accounts.
In general, your spouse might be able to access your bank account without your permission in the case of a court order, or a conservatorship or power of attorney ordered by the court, said Meghan Freed, founder of Freed Marcroft, a Connecticut marital and family law firm.
Also, divorce or death might radically change your spouse’s access to your individual bank accounts.
When opening a joint bank account, both account owners must sign the bank’s forms. If you have joint accounts with your spouse, both of you own those accounts.
A joint bank account offers convenience: Either person can conduct your banking business. Unrestricted access could be helpful if one of you is unable to do banking tasks. The other spouse can take care of all transactions with respect to that account. You might not have that option if you only have separate, individual accounts.
The major disadvantage of joint checking accounts or joint savings accounts is that your spouse can do anything with the joint account — including withdrawing all the funds — even without your knowledge or permission.
In the Event of Divorce
When you divorce, you might have to divide your assets including all individual and joint banking accounts. You might have to surrender some or all of the funds in your individual bank account even though your spouse previously had no ability to access that account. Whether you get to keep the cash might depend on several factors, including the laws of your state and your final divorce settlement.
“There are two types of states; community property and separate property,” said Matthew L. Kreitzer, managing attorney of Booth & McCarthy in Virginia. “The state you are in will ultimately determine what kind of laws apply to the handling of money that is acquired during the marriage.”
The common law is separate property: Each spouse is a separate individual with his own legal and property rights. So, each spouse owns and is taxed upon the income that he earns.
With community property, the theory is that each spouse contributes labor and, in some states, capital, for community ownership; thus, each spouse owns half of all community property, regardless of how much each person actually contributed.
But just because your name is not on your spouse’s account doesn’t mean it’s not community property or funds that will not be divided at the end of a divorce case, said Abby Gregory, divorce attorney with Connatser Family Law in Texas. “It just means the bank will not let you access the account.”
The following states, as well as the U.S. territory of Puerto Rico, have adopted the community property system:
- New Mexico
- Alaska (optional basis)
Within those two categories of property law, specific rules vary by state. Seek the advice of an experienced family law attorney to determine your rights with respect to all your assets, including any bank accounts.
In the Event of Death
If your spouse dies first, that likely won’t affect your rights of legal access to any of your own individual savings or checking accounts. However, if you die first, what happens to your individual bank accounts will depend largely on what you specified in your will. If you leave no valid will, the laws of your state could dictate the result, which might be quite different from what you would have wanted.
“In states like Virginia, distribution of a bank account depends on whether the spouses were designated with a right of survivorship or a payable-on-death account,” said Kreitzer.
If one spouse holds personal accounts and dies, then who receives access could be determined by a trust, said Trout. “If no trust exists, then no one has access to it until it goes through a court proceeding,” he said.
Seek the advice of an experienced estate planning attorney so you can specify how you want all your assets –including any of your individual bank accounts — to be distributed to your surviving spouse and other potential heirs. Review your will and other end-of-life documents periodically to ensure they reflect your wishes.
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