Harrowing tale of a joint bank account...

[sunnyd]

Disclaimer: I''m not advocating either way, I''m just telling a story, probably an atypical one at that. The discussion comes up periodically regarding joint bank accounts, so I thought I''d throw this out there, because it''s scary!

FI has a friend who was with a girl for 4 years. They lived together, spoke of marriage and had a joint bank account. Both dumped all their money into it. Girl managed the finances and paid everything. Boy senses something is up, a breakup might be on the way, so FI advises him to start keeping some of his paycheck in another account. One day, girl announces she''s leaving. She moved out the next day across the country.

She cleaned out the account and left him with nothing. More than nothing! She had dental work put in his name (somehow?) and now he owes some dentist $2000. He got into a couple of accidents last year and is also now being sued by both (unrelated to her, but still sad). He had to declare bankruptcy this week because he couldn''t afford all these things being thrown at him.

It''s just horrible that he thought he could trust her, and now there''s nothing he can do. He''s out 4 years worth of saving. Sure this could happen if you''re married too, but at least then there''s some protection. This is just scary to think.

 

[swingirl]

I understand the empyting of the joint account but I don't see how he could be responsible for someone else's dental work under any circumstance. And if you have car insurance how can you be sued for an accident? I thought that was what insurance was for. He needs an attorney.

The bankruptcy will end up hurting all of us. This poor fella needs to get a grip on his responsibilities.

 

[sunnyd]

I don''t get that either...he didn''t even know about it!

He might have been dropped by his insurance because he was a third wreck before these two.

Not sure on that. He''s definitely aware of the hurt bankruptcy will cause him.

 

[Lauren8211]

Man that sucks.

What is even scarier, is that no one ever thinks it could happen to them.

FF and I don''t have any joint money, and won''t until we''re married.

 

[absolut_blonde]

I think dumping ALL of their money into the joint account was ill-advised and I wouldn''t do that even if married.

I''m a fan of the ''three accounts'' system for spending money - individual accounts for each AND a joint account. Joint is for shared bills/expenses -- mortgage, utilities, groceries, travel. That money goes to bills in both of our names so there would be no benefit to one person squandering the cash anyway since you''d be screwing yourself in the process too.

Then, individual accounts are for fun money or other individual expenses. The other positive to that is nobody can really complain about what the other person spends their fun money on since all joint expenses and joint priorities have already been taken care of.

And then in addition to that, of course, there are savings/investments/etc. Ours are separate, but that depends on what their purpose is I suppose.

Incidentally, the book ''10 conversations to have before you marry'' (I think that''s what it was called-- good book, BTW!) recommends that too.

 

[Inanna]

Unfortunately, I've heard many similar stories about unmarried couples with joint checking accounts, property, etc. I agree that your friend needs a lawyer. What a terrible situation for him to deal with!

I also wholeheartedly agree with Absolute Blonde's 3 account system.

 

[fieryred33143]

That is so horrible

When we joined our accounts I started keeping track on EXCEL of all of our bi-weekly paychecks and what I do with it (I also am in charge of the finances). In it I have percentages of who contributes what with an overall percentage so that in the event we ever split I can say "you have contributed x% over the past X years and therefore here is x% of the money in our savings." And I'll have evidence of it. It goes all the way back to 05/02/2008 when we first joined accounts and includes everything from paychecks, to tax refunds, to holiday checks. And I also have at least 5 years planned out with financial goals that he and I agreed to.

I also email him a detailed list every other Friday (when we get paid) of what is being done with the money for that period that looks something like this:

Deposits
-Savings for bills
-Credit card payments
-Car loans
=Left in checking

To which he usually responds with "what do you want for dinner tonight?" LOL

It would be foolish to just go into it thinking everything will be perfect forever. It's best to always prepare yourself.

 

[sunnyd]

Date: 4/24/2009 2:25:16 PM
Author: absolut_blonde
I think dumping ALL of their money into the joint account was ill-advised and I wouldn''t do that even if married.

I''m a fan of the ''three accounts'' system for spending money - individual accounts for each AND a joint account. Joint is for shared bills/expenses -- mortgage, utilities, groceries, travel. That money goes to bills in both of our names so there would be no benefit to one person squandering the cash anyway since you''d be screwing yourself in the process too.

Then, individual accounts are for fun money or other individual expenses. The other positive to that is nobody can really complain about what the other person spends their fun money on since all joint expenses and joint priorities have already been taken care of.

And then in addition to that, of course, there are savings/investments/etc. Ours are separate, but that depends on what their purpose is I suppose.

Incidentally, the book ''10 conversations to have before you marry'' (I think that''s what it was called-- good book, BTW!) recommends that too.

This is what we plan on doing also when we''re married, or shortly before. Because it is a pain in the arse figuring who owes what for what sometimes!

Even with a crazy detailed spreadsheet!

 

[sammyj]

Date: 4/24/2009 2:38:38 PM
Author: fieryred33143
That is so horrible

When we joined our accounts I started keeping track on EXCEL of all of our bi-weekly paychecks and what I do with it (I also am in charge of the finances). In it I have percentages of who contributes what with an overall percentage so that in the event we ever split I can say ''you have contributed x% over the past 2 years and therefore here is x% of the money in our savings.'' And I''ll have evidence of it. It goes all the way back to 05/02/2008 when we first joined accounts and includes everything from paychecks, to tax refunds, to holiday checks. And I also have at least 5 years planned out with financial goals that he and I agreed to.

I also email him a detailed list every other Friday (when we get paid) of what is being done with the money for that period that looks something like this:

Deposits
-Savings for bills
-Credit card payments
-Car loans
=Left in checking

To which he usually responds with ''what do you want for dinner tonight?'' LOL

It would be foolish to just go into it thinking everything will be perfect forever. It''s best to always prepare yourself.

hahaha fiery, the financials are handled the same way in our relationship however the roles are completely reversed in mine!

sunnyd, that really sucks about your FI''s friend. What a b****!

 

[audball]

I''m in the pool of a 3 account system, even after marriage. Joint for shared bills, individual for personal. We will likely have some joint savings and investments and some personal as well.

 

[purrfectpear]

Just so you''ll all know, it''s perfectly legal for a spouse to clean out a joint account in it''s entirety...regardless of the "percentage" they put in there

I wouldn''t want any of you youngsters harboring any naive assumptions

If you want to protect yourself from "what if''s" you need to have your own personal savings account. It is still considered part of community property in case of divorce, but at least he/she would have to fight for it in court...not just withdraw it at the teller window.

 

[bee*]

Date: 4/24/2009 2:56:58 PM
Author: audball
I''m in the pool of a 3 account system, even after marriage. Joint for shared bills, individual for personal. We will likely have some joint savings and investments and some personal as well.

Yeah I agree with this too. That''s awful for your friend sunnyd. I think that he definitely should go seek help.

 

[sunnyd]

Date: 4/24/2009 3:38:01 PM
Author: purrfectpear
Just so you''ll all know, it''s perfectly legal for a spouse to clean out a joint account in it''s entirety...regardless of the ''percentage'' they put in there

I wouldn''t want any of you youngsters harboring any naive assumptions

If you want to protect yourself from ''what if''s'' you need to have your own personal savings account. It is still considered part of community property in case of divorce, but at least he/she would have to fight for it in court...not just withdraw it at the teller window.

This is also good to know, PP, thanks!

 

[dragonfly411]

my SO had over 12,000 saved up in his 19 years from rebuilding and selling trucks and atvs and working since he was 15 and working on farms in his spare time. SO''s ex drained it all

 

[monarch64]

Date: 4/24/2009 2:06:22 PM
Author: swingirl
I understand the empyting of the joint account but I don''t see how he could be responsible for someone else''s dental work under any circumstance. And if you have car insurance how can you be sued for an accident? I thought that was what insurance was for. He needs an attorney.

The bankruptcy will end up hurting all of us. This poor fella needs to get a grip on his responsibilities.

Is it possible that his insurance provided for her? Some companies offer benefits to co-habiting couples. If that was the case, then his name would show up on all the dental billing.

My stbx-husband has stuck me with a ton of dental/medical bills, because my insurance was better through my company so I put him on my health/dental/vision. He never bothered to pay off his dental or medical bills for about the past 2.5 years and now I am getting collection notices from the health care providers.

 

[Rhea]

Date: 4/24/2009 3:38:01 PM
Author: purrfectpear
Just so you''ll all know, it''s perfectly legal for a spouse to clean out a joint account in it''s entirety...regardless of the ''percentage'' they put in there

I wouldn''t want any of you youngsters harboring any naive assumptions

If you want to protect yourself from ''what if''s'' you need to have your own personal savings account. It is still considered part of community property in case of divorce, but at least he/she would have to fight for it in court...not just withdraw it at the teller window.

I like your public service annoucements. I''m not sure why people think their joint accounts are more protected in marriage than in any other type of relationship.

 

[sunnyd]

Date: 4/24/2009 3:52:34 PM
Author: monarch64

Date: 4/24/2009 2:06:22 PM
Author: swingirl
I understand the empyting of the joint account but I don''t see how he could be responsible for someone else''s dental work under any circumstance. And if you have car insurance how can you be sued for an accident? I thought that was what insurance was for. He needs an attorney.

The bankruptcy will end up hurting all of us. This poor fella needs to get a grip on his responsibilities.

Is it possible that his insurance provided for her? Some companies offer benefits to co-habiting couples. If that was the case, then his name would show up on all the dental billing.

My stbx-husband has stuck me with a ton of dental/medical bills, because my insurance was better through my company so I put him on my health/dental/vision. He never bothered to pay off his dental or medical bills for about the past 2.5 years and now I am getting collection notices from the health care providers.

Maybe that''s it. That sucks Mon.

 

[monarch64]

Date: 4/24/2009 4:16:27 PM
Author: sunnyd

Date: 4/24/2009 3:52:34 PM
Author: monarch64

Date: 4/24/2009 2:06:22 PM
Author: swingirl
I understand the empyting of the joint account but I don''t see how he could be responsible for someone else''s dental work under any circumstance. And if you have car insurance how can you be sued for an accident? I thought that was what insurance was for. He needs an attorney.

The bankruptcy will end up hurting all of us. This poor fella needs to get a grip on his responsibilities.

Is it possible that his insurance provided for her? Some companies offer benefits to co-habiting couples. If that was the case, then his name would show up on all the dental billing.

My stbx-husband has stuck me with a ton of dental/medical bills, because my insurance was better through my company so I put him on my health/dental/vision. He never bothered to pay off his dental or medical bills for about the past 2.5 years and now I am getting collection notices from the health care providers.

Maybe that''s it. That sucks Mon.

It does suck. But ya know, I was smart enough never to combine checking accounts or credit card accounts with him. Maybe that was not an optimistic decision to make in the beginning of the marriage, but it was a realistic one and I''m glad I made it.

 

[fieryred33143]

Date: 4/24/2009 3:38:01 PM
Author: purrfectpear
Just so you'll all know, it's perfectly legal for a spouse to clean out a joint account in it's entirety...regardless of the 'percentage' they put in there

I wouldn't want any of you youngsters harboring any naive assumptions

If you want to protect yourself from 'what if's' you need to have your own personal savings account. It is still considered part of community property in case of divorce, but at least he/she would have to fight for it in court...not just withdraw it at the teller window.

He'd have to know how to get to the account first

And for the record I don't think our joint accounts are more protected in marriage than in any other type of relationship. I did pay a little attention in my courses of finances while getting my masters.

Just a little though...

 

[musey]

your poor friend. Unbelievable... SOME PEOPLE, I tell ya.

 

[princesss]

I really hate joint accounts. Really really. They''re good for paying bills and stuff, I guess, but I like having my money where only I can get to it. Selfish, maybe, but you never know when or why you''ll need it.

 

[audball]

Obviously the spouse, SO, whatever with their name on a joint account has access to that account and could clear it out easily married or not. However, with the 3 accounts plan the ONLY money in the joint account each month would be the necessary money needed for each of us to pay our portion of the JOINT bills only, cleaning that account out wouldn''t hurt as badly as losing all your savings, but most wouldn''t be stupid enough to clean that account out anyway since not paying those joint bills (in both names) would hurt them as well.

 

[Deelight]

Date: 4/24/2009 6:58:21 PM
Author: princesss
I really hate joint accounts. Really really. They''re good for paying bills and stuff, I guess, but I like having my money where only I can get to it. Selfish, maybe, but you never know when or why you''ll need it.

Ditto, I don''t get the need for it either - sign me into the camp of NEVER EVER will I have a joint account.

 

[jcarlylew]

Date: 4/24/2009 2:38:38 PM
Author: fieryred33143
That is so horrible

When we joined our accounts I started keeping track on EXCEL of all of our bi-weekly paychecks and what I do with it (I also am in charge of the finances). In it I have percentages of who contributes what with an overall percentage so that in the event we ever split I can say ''you have contributed x% over the past X years and therefore here is x% of the money in our savings.'' And I''ll have evidence of it. It goes all the way back to 05/02/2008 when we first joined accounts and includes everything from paychecks, to tax refunds, to holiday checks. And I also have at least 5 years planned out with financial goals that he and I agreed to.

I also email him a detailed list every other Friday (when we get paid) of what is being done with the money for that period that looks something like this:

Deposits
-Savings for bills
-Credit card payments
-Car loans
=Left in checking

To which he usually responds with ''what do you want for dinner tonight?'' LOL

It would be foolish to just go into it thinking everything will be perfect forever. It''s best to always prepare yourself.

can i have that spread sheet?? we have a similar situation, and everytime i go over finances, E''s eyes glaze over. so guess what answer he gets when he askes about them???

 

[diamondseeker2006]

In principle, I''d say someone who doesn''t trust their future spouse enough to combine finances (after the wedding), then they probably do not have a good enough foundation for marriage. Ours has been combined since day 1. We do have multiple accounts and all are joint, but we each keep a checkbook for incidental expenses while bills come out of the main account. It''s worked for 30+ years so far. I pretty much keep the books at home because hubby has to do budgets, etc. for the plants he manages.

 

[PrincessLily2009]

Weird...BF and I just closed our combined accounts today.

The 3 account system is great, as long as you can trust each other to put your half into the shared account. (Not everyone is responsible with money, and it''s impossible to be married to that type of person without them pulling you under.)

 

[princesss]

Date: 4/24/2009 9:49:58 PM
Author: PrincessLily2009
Weird...BF and I just closed our combined accounts today.


The 3 account system is great, as long as you can trust each other to put your half into the shared account. (Not everyone is responsible with money, and it''s impossible to be married to that type of person without them pulling you under.)

No matter what, as soon as you have a joint payment, you have to trust the other person to pull their financial weight.

I like the 3 account system, as I''m a total control freak and a slight shopaholic. I like the idea of having my money and our money, keeping individual wants separate from combined needs. It helps me compartmentalize "fun money" and "important money." That way if I spend more than I want to, it''s my account that suffers and not the family account. I do believe in financial transparency, though. I think knowing your partner''s spending habits, income, and debts is a huge part of mingling (or fulling merging) finances and lives.

 

[PrincessLily2009]

Right, but let''s say one of you spends all their fun money, plus borrows extra, and then they can''t make their contribution to the shared account. The other will either have to sacrifice their spending money to pay your share of the bills, or you will both just have unpaid bills.

I''m just saying that the 3 account system only works for a certain type of person/couple.

 

[princesss]

Date: 4/24/2009 10:20:38 PM
Author: PrincessLily2009
Right, but let''s say one of you spends all their fun money, plus borrows extra, and then they can''t make their contribution to the shared account. The other will either have to sacrifice their spending money to pay your share of the bills, or you will both just have unpaid bills.


I''m just saying that the 3 account system only works for a certain type of person/couple.

Yeah, I see what you''re saying. I''m a huge believer in automatic deposits, so you at least don''t have to worry about them not putting in enough. It just goes right in! (I don''t know about your banks/paychecks, but mine can be split among different accounts, and can be done on a flat dollar amount or percentage of your check.)

 

[diamondseeker2006]

Date: 4/24/2009 10:20:38 PM
Author: PrincessLily2009
Right, but let''s say one of you spends all their fun money, plus borrows extra, and then they can''t make their contribution to the shared account. The other will either have to sacrifice their spending money to pay your share of the bills, or you will both just have unpaid bills.

I''m just saying that the 3 account system only works for a certain type of person/couple.

How can a marriage work like this? A person who is not responsible enough to take care of the bills is surely not good marriage material, IMO.