Can You Remove Yourself From a Joint Bank Account?
You can typically remove yourself from a joint bank account, but financial institutions’ policies on this may vary. It’s wise to check with your bank about how to separate yourself from a shared account.
Joint bank accounts can work well for many banking customers. Spouses may find it easier to budget together with a joint bank account, and parents may open a bank account with a child to help them learn how to manage their money. But what happens when you no longer want to be on the joint bank account?
Read on to learn more about your options.
What Is a Joint Bank Account?
A joint bank account is a checking or savings account that is shared between two or more people. Each person has full access to the money, meaning they can withdraw, deposit, and spend funds without having to get the other account holder’s approval.
The account holders are equally liable for the checking or savings account, including any debts and fees it incurs. For instance, if the account goes into overdraft, the joint account will incur fees, even if only one party was responsible.
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Reasons to Remove Yourself From a Joint Bank Account
As time passes, joint account holders may no longer need or want to share an account. Here are a few reasons why someone would want to remove themselves from a joint account.
Separation or Divorce
When breaking up with a partner or divorcing a spouse, you’ll likely want total control of your own money.
That means you’ll need to close any joint bank accounts (and joint credit cards) and start anew — or simply remove yourself from the account and start your own while your ex maintains the existing account, if allowed by the bank.
End of Business Partnership
If you and a business partner are closing your enterprise and going your separate ways, you will want to shut down your business checking account and/or business savings account. If you’re stepping down from the business but the partner is going to continue running it, it might be possible to remove your name from the account rather than close it completely.
Child Getting Their Own Account
Some parents may choose to be a joint account holder on their child’s first bank account. This can help parents teach a child about money management and monitor financial decisions closely. When children go to college, this can be an easy way to ensure they have enough money for food, rent, books, and other expenses.
But at a certain point, it makes sense for a parent to remove themself from the child’s checking account.
Reduction of Financial Ties
There are other specific scenarios where joint account holders may want to sever their financial ties. For instance, if the other account holder (non-spouse) is being sued, you may want to remove them from the account to protect the assets. Removing someone else from a joint account, however, typically requires that individual’s consent and may depend on bank policy or state law.
Steps to Remove Yourself From a Joint Bank Account
In terms of how to remove yourself from a joint bank account, some banks will allow one party to exit, often with the other person’s consent. Other banks, however, may require the account to be closed in full, rather than remove a single account holder.
Assuming your bank allows you to remove yourself from the joint account and you have alerted the other account holder(s), here are the steps you’ll typically need to follow:
Request Account Closure or Complete Paperwork
The first step to removing yourself from a joint bank account is reading your bank’s policy or reaching out to a customer service representative to understand the process. In some cases, the bank may simply require you to close the account entirely. State laws and individual bank policies typically require all joint bank account holders to approve the closure before you can move forward.
In the event that the bank will let you remove your name from a joint account, follow the bank’s guidelines, which may require one or both individuals to visit a local branch or fill out a form online.
Pay Fees
Before a joint account can be closed, a bank will require you to pay any outstanding fees. But in the case of simply removing yourself from a joint account but keeping it open in the other account holder’s name, you should work out if you’re responsible for paying off any account debts before taking yourself off the account.
Withdraw Remaining Funds
You and the joint account holder should review the current balance and determine how much, if any, of the funds you should withdraw for yourself. This will need to be addressed whether you are closing the account or removing your name from the joint bank account.
You won’t have access to withdraw money once your name is taken off, so make sure you know how to withdraw money from any checking account and savings account you share before moving forward.
Required Documentation
Your bank will spell out specific documentation required when removing yourself from a joint bank account. Typically, you will need to provide:
• Proof of identification
• Proof of account ownership, like a bank statement and debit card
• Written approval from the other joint account holder(s), as noted above
Recommended: Should Married Couples Have Joint Bank Accounts?
Issues to Be Aware Of
When removing yourself from a joint bank account (or closing the account entirely, if the bank doesn’t allow a single account holder to remove themselves), there are a few things you’ll want to consider.
Outstanding Checks and Automatic Payments
If you’ve written any checks or have any transactions that are currently processing, you’ll want to make sure those go through before you withdraw your portion of the funds from the account. Similarly, if you have automatic bill payments set up, you’ll need to switch these to your new bank account before removing yourself.
Otherwise, the remaining joint account holder will inadvertently pay your next set of bills. Or, if the joint account needs to be closed, you could wind up with a slew of returned (unpaid) payments.
Direct Deposits
Similarly, if you have direct deposit set up with your employer or a government entity (such as for Social Security benefits or tax refunds), make sure you redirect those to your new bank account. This ensures you don’t miss any money sent to you.
Remaining Account Holder Approval
Before taking yourself off a joint bank account, you’ll need to let the other account holder know. Banks that allow one account holder to take their name off the account may require you to submit written approval from the other account holder or might even require that all parties visit a local branch in person.
Potential Bank Fees
Your bank may charge a fee to remove your name from a joint bank account. When speaking with a bank representative about the process, ask about these fees so you know what to expect.
Alternative to Removal
If a bank does not allow you to remove your name from a joint bank account for some reason, the main alternative is to close the account altogether. You’ll need the consent of all account holders to close the account.
You can follow the steps for how to close a joint bank account if this is the route you need to take.
The Takeaway
Opening a joint bank account can add flexibility for people with shared financial goals and responsibilities. However, there may come a time when you no longer want to be on a joint bank account. While some banks may permit you to remove one of the account holders, others may require that you close the account entirely, with each joint member then opening their own new account, if they like.
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FAQ
Can one person remove themselves from a joint bank account?
Some banks may allow one person to remove themself from a joint bank account, but there are typically clear guidelines for how to go about this. That may include written permission from the other account holder. In some scenarios, banks and credit unions may require that the account be closed and each person start fresh on their own.
Do I have to notify the other person on the account?
If you plan to remove yourself from a joint bank account, you need to let the other person know. In fact, banks that allow you to remove your name from a joint account without closing it may require written permission from the other account holder.
What if other owners don’t approve the removal?
If you would like to be removed from a joint bank account but the other account holder won’t approve, work with your financial institution to determine the next steps, as they may vary from bank to bank and state to state. Sharing money can be hard enough, but when account holders aren’t seeing eye to eye, things can get tricky.
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