Can You Close A Joint Bank Account Without The Other Owner's Permission?

Let's say that a woman goes to the bank to withdraw money from a joint account she holds with her husband and is shocked to discover that the balance is much lower than she expected. Her husband, she learns, has been steadily withdrawing significant amounts of money. From a personal perspective, that serves as a key warning sign of financial infidelity in a marriage — a situation in which one partner's trust is financially violated by the other partner. In response, can she close out the joint account? She may be able to, as long as the account is structured as a Joint Tenancy with Right of Survivorship (JTWROS), and the bank's policies permit unilateral closure.  

A joint bank account, by definition, is one held by two or more people or entities. Savings accounts and checking accounts could be held jointly. In general, state laws create a high-level structure on how joint (and other) banks accounts can be set up, with the bank's policies dictating the specifics. They can be set up as "and" accounts — these are structured as Tenancy in Common accounts, which would require both, or all, signatures for withdrawals. Or they can be created as "or" accounts (structured as JTWROS), which would require just one of the holders' signatures. In our example, the husband could withdraw funds unilaterally, and because the wife intended to make a withdrawal alone, this account clearly falls under the JTWROS ownership structure. To further investigate whether she could close the account by herself, the woman could ask the bank whether the institution's policies and state laws allow her to do so. 

If the bank agreement that a person signed when opening the account lists it as JTWROS, each person named on the account is a full owner of the whole account. Under this scenario, that person has full control over withdrawing funds, up to and including all of the funds. Withdrawing all of the money, though, is not the same as closing the account; some banks allow the latter, while others don't. The bank may allow closure with one signature or require consent from all account holders. With Tenancy in Common, each account holder owns a distinctly described portion of the bank account. Depending upon bank rules, closing the account may require all account holder signatures. Or the bank may allow one of the account holders to close out their particular portion of the account.

If the woman in our example withdrew all of the account's funds, she might choose to create an account for herself, something that money guru Kevin O'Leary recommends for all couples. Caveat: When a person obtains funds from closing a bank account, this means they have physical access to the money. Having this access, though, doesn't necessarily eliminate any claims that the other joint account party holder has to those funds. This is one of the financial considerations that can arise if a couple is divorcing, and it can become an issue that mediation or a court case must resolve.