Alternatives to Joint Bank Accounts
One alternative to a joint bank account is to add an additional card member or authorized user to a credit card. You and every additional card member would share the same credit card account which can then be used to pay for shared expenses like groceries, streaming service subscriptions, home furnishings, and maybe even gas if you share vehicles – all with the possibility of earning rewards points or cash back for purchases. However, like joint bank accounts, it’s important to note that adding additional card members can have its own risks. For example, the primary account holder is legally responsible for monthly payments, so it’s a good idea to make careful arrangements with whomever you choose to share your account with.
But there are other options as well. Particularly for older Americans, it may be worth checking out whether another arrangement would meet your needs better than a joint bank account or additional card member on a credit card. Alternatives include:
- Signature authority on an elderly relative’s account: You’ll be able to write checks on their behalf, but your creditors won’t be able to seize the money and it won’t pass to you automatically on death.
- Power of attorney: A legal agreement that gives you the power to make financial decisions and perform transactions on behalf of your elderly relative if they become incapacitated.
- Revocable living trust: Your relative can open a revocable living trust with you as co-trustee, then open a bank account in the name of the trust with two account holders.
- Guardianship: If your relative is unable to take responsibility for their own financial affairs, and you have no power of attorney, you can apply to the court for a guardianship order which makes you legally responsible for your relative’s finances.
If paying for funeral expenses and other bills after death is a concern, your relative can make their accounts “payable on death,” which means the money goes directly to the beneficiaries of their will without having to clear legal hurdles. It’s worth consulting a lawyer to ensure that this doesn’t conflict with a will or estate planning arrangements.