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By Anne Purcell
When you open a savings or checking account, there are a few things to keep in mind. One is adding a joint owner to the account and beneficiaries. While there are many differences between these two roles, the one similar trait is that by having a joint owner or beneficiaries on your account, there is no question concerning who the money goes to in the event of your passing. However, the purpose of these two roles is otherwise quite different.
Here are some similarities and differences between a joint owner and a beneficiary and how to determine what would be best for you to add to your bank account:
In simple terms, having a joint owner on your savings or checking account means that you will share the account with another person. Having joint ownership over an account is popular among married couples or those in partnerships since it makes splitting expenses such as rent/mortgages, childcare or other bills easier than keeping separate accounts. This can also provide more transparency over how the money is spent between two people in a partnership, which can help with budgeting or saving for larger purchases. Joint ownerships also help simplify the legal process, for if one person on the account passes, the money will go to the joint owner.
Depending on your banking institution, there may be different levels of joint ownership. At Alliant, if the joint owner is not a member of Alliant, they will have limited access to many resources, such as the ability to bank online. However, if the joint owner is also an Alliant member and the primary member grants access, they gain access to many more features, such as viewing account and transaction summaries, performing card management tasks and making transfers between their own individual Alliant account and the one in which they are a joint owner.
A beneficiary, instead, is someone on your account who cannot access an account unless the account holder passes away. Unlike a joint account owner, they do not have the same permissions and cannot do anything while the account owner is alive.
A huge benefit of this is that it creates much less of a headache for your loved ones in the event of your passing. If your account doesn't have a joint owner or a beneficiary, the account will likely go through probate, which can be an expensive and time-consuming process. Instead, a beneficiary should be able to access the account following the account owner's death easily. They would just have to provide the proper documentation, such as a death certificate of the account owner and a personal ID.
While having a joint owner on an account may be the right call for some people, it isn't always necessary. In some cases, such as if you are in a partnership and want to share and keep your money together more easily – a joint account would work for you. Or, if you want to open an account for your child but want to oversee it until they are a little older, having a joint account would also be a good idea.
However, if you don't want to share your accounts with another person but want better to prepare yourself and your family if something happens to you, adding a beneficiary will help save your family many headaches.
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