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Legal implications of joint accounts

Hi

I know you're not legal advisors, but does anyone know what the pitfalls are of opening a joint savings account?

I am trying to keep my son's hands off all the money I have painfully squirrelled away for him. As he's 16, he can now, legally, get his hands on it. I've not scrimped and saved for him to throw it all away. I think I can just about persuade him to move it to a joint account where we both have to sign for withdrawals, but just wondered what I am letting myself in for by doing this.

Not worried about credit ratings. Only use credit cards for convenience - never pay interest.

Best wishes

Comments

  • Innys
    Innys Posts: 1,881 Forumite
    When you open a joint account, you become financially "linked" with the other party - and it seems only to be the case for any problems they have.

    So, if your son gets into debt and can't repay it, that will be reflected, to an extent, in your credit rating.

    You mention that you aren't worried about credit ratings. Are you sure? Will you never need to take out a mortgage, loan or open a bank account in the future? Ever?

    If so, the joint account is one option, but not the best. How about setting up a trust of some decription in his favour instead?
  • Hi Innys

    Thanks for that. A trust sounds like it would involve lawyers and therefore a couple of hundred pounds. As we are not talking big money here, ~ £8,500, that would perhaps be an expensive way to protect it.

    It's not a huge amount of money in savings terms, but it could buy him a few years of riotous living. I know some of his friends are on drugs already, and the booze they knock back...

    I intend to let him have the money outright in maybe 5 or 7 years anyway, as, hopefully, he'll be a bit more sensible then. The joint account would therefore not go on too long. If my credit rating is reduced by his behaviour, I presume it would recover a while after the joint account was closed?
  • rjm2k1
    rjm2k1 Posts: 651 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    You would need to look into the tax position of this arrangement, presumably you are taxed, but your son isn't.
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