Credit Problems

• In most cases, if you have a joint bank account with someone who has credit problems, creditors can ask the court to allow them to put a levy on your joint account. If the court grants this request, creditors can seize funds from the joint account to repay the debt, even if the funds were not deposited by the debtor. If the creditor is a state entity, therefore, the state can access money in a joint account for debt collection purposes.
  
  

Death of Account Owner

• If one owner of a joint account dies, the funds in the account automatically go to the other owner. Joint account owners cannot change this process via a will. Thus, neither creditors nor heirs other than the other account owner can access the funds after the original owner dies. If the surviving owner owes money to the state, the state can go through the courts to get permission to access the account and repay the debt.
  
  

Medicaid

• Your state of residence can access information about your bank accounts to determine whether you qualify for Medicaid coverage. If you have a joint account, the state can access information such as the balance of the joint account. If your joint account has a large balance as a result of the other owner's assets, Medicaid may deny you coverage. In addition, you cannot transfer assets in and out of the joint account during a Medicaid claim, as that may be considered an improper transfer of assets.
  
  

Considerations

• Although owning a joint account can make it easier to transfer assets to the other owner of the account after death, joint accounts may be risky. Only open a joint account with someone you know is financially responsible and trustworthy. In addition, you may wish to keep your finances separate from others to avoid confusion or problems if you need government assistance because of financial problems.