The Joint Account

Many, many married and common-law couples have joint accounts during their relationship. These accounts are commonly used to pay household expenses and in many instances, pre-authorized payments are made from the joint account on a regular basis, on behalf of the household, and for the personal expenses of each of the parties. On separation, some decisions will have to be made as to what to do with the joint account. There are rare instances where a separated couple may decide to maintain a joint account post-separation ~ this usually has to do with the way they elect to pay the children's expenses but that is an exception rather than the rule.

 In most cases, the joint account needs to be closed because banks do not permit either of the parties to take over the account on their own. One of the issues to be considered here is timing-when will the joint account be closed? If following the separation, the parties continue to live together in the same residence (called “living separate and apart under the same roof”), it may make sense to maintain the joint account and have the usual expenses of the household continue to be paid from the joint account until other arrangements are made.

 Generally speaking, when separated spouses begin to live in their own separate residences, the joint account needs to be closed and here, special attention needs to be paid to any pre-authorized payments, including, for example: utilities, life insurance payments, and car insurance. The parties need to make specific arrangements for redirecting those pre-authorized payments or terminating them if the residence in which they resided at separation is sold. If one party has bought out the other, he or she will be taking over the house-related expenses but that will not be done with the use of the joint account. Again, it will need to be closed.

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