I’m moving in with my partner for the first time and we plan to set up a joint account for practical reasons. Am I exposing myself to any risk financially? I’m concerned about sharing my money with someone else.
Sarah Jane Boon, partner at Charles Russell Speechlys, says that while opening a joint account with your partner is a significant step in your financial journey together, it’s also sensible to be aware of the potential risks.
Generally, when couples move in together two lives begin to merge, and each partner naturally becomes more involved in the other’s schedules, decisions and finances.
Managing finances together can also allow for better budgeting, as you and your partner track your expenses collectively and work together to establish realistic budgets that match your shared goals. Consolidating finances can streamline bill payments, savings and other financial responsibilities.
Of course, if you plan to have children or purchase a property together, joint accounts become even more of an inevitability due to shared outgoings and often a desire for greater visibility of your household’s overall financial position.
However, there are several issues to consider, which may not be immediately obvious. Joint accounts can expose both parties named on the account to potential financial risks, including liabilities from overdrafts, debts or associated legal issues. In the event of a break-up or divorce, dividing assets held in joint accounts can be complex and contentious.
What many don’t realise is that, legally, all money held in a joint bank account is owned by anyone named as an account holder. In most cases, withdrawals from the account only require one person’s authorisation and a party is not limited only to withdraw “their half” of a jointly held balance.
This means it is entirely legal for one person to take money from the account without the other knowing, which can lead to significant disputes for couples going through divorce or separating (who often assume the balance held in the account will automatically be shared equally).
With joint ownership comes shared responsibility for the account. If one partner overspends or mismanages funds, it can affect both individuals’ credit scores and financial wellbeing.
That’s not to say that joint accounts are a bad thing. In the majority of cases, they are useful and practical and, when opened with a trusted partner or family member, can bring many saving and spending benefits.
But before taking this step with your partner, you should engage in open and honest discussions about your financial values, goals and concerns.
Has my late aunt’s nurse influenced a will change?
My wealthy aunt died recently at her home in London, leaving property assets there and in Switzerland, plus bank accounts, various overseas trusts and share portfolios. Her former nurse has produced the latest copy of my aunt’s will, of which she is a beneficiary to a larger extent than the family realised. We are concerned about the possibility it was changed recently due to malign influence. What should we do?
Laura Phillips, legal director at law firm Kingsley Napley, says a good first step would be to investigate the preparation and execution of your aunt’s will. For example, try to find out if it was prepared by a solicitor or will writer (the information would usually be found somewhere on the will). If so, try to obtain the will file containing attendance notes or instructions as to why your aunt made the decisions and legacies that she did.
This may also show whether the nurse was present when instructions were given. If the will is homemade — for example, if no independent person was instructed to assist — try to gather information about your aunt’s demeanour and health when the will was made.
If you have suspicions about the nurse’s influence over your aunt, there are several ways a will could be challenged in England and Wales. The rules are different in Scotland and Northern Ireland. Depending on the evidence, it is possible to bring claims for more than one of these types of issues.
The first consideration is whether your aunt was suffering from a condition affecting her mental capacity, such as dementia. To make a will, a person must have capacity. Even if someone has a diagnosis of cognitive illness, however, this does not automatically mean they lack testamentary capacity. It will require a detailed review of the medical evidence and other contemporaneous documents to assess this.
It is also possible that, even if your aunt did not suffer from such a condition, she may not have known and approved the entire contents of her will. For a will to be valid, the testator must be aware of its contents including all the details, however complex, and whichever gifts are specified.
Our next question
I am going through the process of divorcing my husband and have found out he’s borrowed money, unbeknown to me, from his parents, to help pay our mortgage for the past few months due to our rate going up significantly. I thought our finances were relatively simple, but these soft loans have thrown our divorce agreement in a spin — am I liable to help pay back his parents, even though I had no knowledge of these loans?
Finally, you should consider whether your aunt may have been unduly influenced or coerced by her nurse. Undue influence claims are quite often pleaded but are very difficult to prove because the person who could give evidence that they were being coerced is deceased. However, contemporaneous documents such as medical records, diary entries, and the recollections of other people who were close to your aunt and may have had suspicions can be considered.
The assets held in overseas trusts will not pass under your aunt’s will so you would need to consider the trust documents or contact the trustees to establish who are the beneficiaries of any trust assets following her death.
Given your aunt also had assets in Switzerland, you should also obtain advice from a lawyer there to establish how the will (and any challenge to its validity) would be treated under Swiss law.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to money@ft.com
