Either party may withdraw all the money from a joint account. The other party may sue in small claims court to get some money back. The amount awarded can vary, depending on issues such as whether joint bills were paid from the account or how much each party contributed to the account.
Either of the parties can empty the account, regardless of who deposited monies and legally they are entitled to do so and the bank or building society where the money is held, is not able to provide the other party with any relief.
Understanding Joint Accounts
Whenever two people are joint owners in a bank account, each has an equal right to the funds contained therein. This means that either owner would be allowed to empty the account at any time, regardless of which person deposited the funds.
It's also possible to remove yourself from a joint bank account without closing it. All account holders need to agree to any changes in the account's ownership. You may both need to be present at a bank to request these changes.
It Can Lead to Legal Consequences
If you remove all funds from your joint account, without agreement from both parties, you may be accused of violating asset division laws or hiding assets.
It is common for couples to maintain joint accounts during marriage. Both parties will have equal rights to the account and can make deposits and withdraw funds from the account. Both parties will also be responsible for any account debts, such as on a joint line of credit.
Most joint bank or credit union accounts are held with “rights of survivorship.” This means that when one account owner dies, the money passes to the surviving owner, or equally to the rest of the owners if there are multiple people on the account.
A joint owner or co-owner means that both owners have the same access to the account. As an owner of the account, both co-owners can deposit, withdraw, or close the account. You most likely want to reserve this for someone with whom you already have a financial relationship, such as a family member.
The first step in removing the name of a joint bank account holder is to obtain the form for account deletion from the bank or from the website. All other account holders, including those whose names are being deleted, must complete and sign the form.
Disadvantages of a joint bank account with separate finances
You will need to agree who tops up the joint account if you get unusually large bills or direct debits go up. And you need to decide who is going to pay for big items such as holidays or a new washing machine or car.
Ask your bank to change the way any joint account is set up so that both of you have to agree to any money being withdrawn, or to freeze it. Be aware that if you freeze the account, both of you have to agree to 'unfreeze' it.
If you have a joint account, you both may have to pay taxes on a portion of the interest income. However, the bank will only send one 1099-INT tax form. You can ask the bank who will receive the form because that person has to list the income on their tax return.
While each owner is granted equal access to the account, a few important points merit considerations. Once the joint account is established, any owner retains the right to withdraw funds or even close the account entirely.
With a joint bank account, the joint account holder typically retains ownership of the account under the right of survivorship. "The surviving owner will be able to withdraw funds from the account," says David Doehring, probate attorney and managing partner of Doehring & Doehring Attorneys at Law.
Everyone named on the account is equally responsible and can withdraw cash or spend whenever they like. If someone else spends too much and borrows money using an overdraft, the bank could ask you to repay it.
Can they do that? In most circumstances, either person on a joint checking account can withdraw money from and close the account. Ask your bank or check the account agreement to see if this is the case for your account. State law may also provide you some protection in this situation.
How can I remove someone from a joint account? expandable section. You'll need to visit a branch if you'd like to remove someone from the account. Just make sure any overdraft debt is cleared before you do.
It is important to note that either party is legally entitled to completely empty a joint account of all funds.
If your spouse has emptied a joint account without justification, they may face several consequences: Replacement of funds: The judge may order your spouse to return the money to the account, even if it has been spent or invested elsewhere. This could include covering any withdrawal penalties or fees incurred.
Your bank may allow just one person to close the account over the phone, in person, or online. However, some banks require both account holders to visit in person, either together or separately. Because policies vary by bank, contact yours to find out if you can close a joint account on your own.
In general, you need your spouse's consent to remove them from a joint account. In most cases, either state law or the terms of the account prevent someone from removing the other person from a joint checking account without their consent. Some banks, though, may offer accounts where they allow this type of removal.