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If a joint owner of a bank account spends a significant portion of money without the other’s permission and doesn’t ascribe ownership of the purchases to the other parties, what are the legal and non-legal remedies available?

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    Cancelling the shared account or keeping a sum < N in it, where N is the maximum amount you'd be comfortable with if it was spent without prior discussion. Since this has already happened, I'd go with the first option. Jul 10, 2022 at 8:15
  • A joint bank account is typically one where either (or if more than two, any) account holder can appropriate the entire funds for themselves at any time. Monies once withdrawn from the joint account, or any purchases resulting, are not themselves co-owned by the other account holders.
    – Steve
    Jul 10, 2022 at 8:49
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    Did the bank not explain the potential consequences when the account was set up? Jul 10, 2022 at 21:20
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    Can we be clear whether "If the person who shares a joint bank account with…" means "If one of the people who share a joint bank account…"? In every-day English, guesswork would be fine but let's remember, the Question supposes a serious and detailed legal problem… Jul 10, 2022 at 21:22
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    What country? Legislation vary wildly on that.
    – Mołot
    Jul 11, 2022 at 21:31

2 Answers 2

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In most cases, there is no direct legal recourse for such a withdrawal. Money in a joint account is co-owned, and any account holder may withdraw any of it for any lawful purpose.

As the article "What is a joint bank account?" from Bankrate.com states:

The money in joint accounts belongs to both owners. Either person can withdraw or spend the money at will — even if they weren’t the one to deposit the funds. The bank makes no distinction between money deposited by one person or the other, making a joint account useful for handling shared expenses. But a joint bank account should only be opened with someone whom you trust, since that person has equal control over the account’s funds.

If the account holders have a contract or legal agreement that controls what money can be withdrawn and for what purposes, then a violation of such an agreement might be a cause for legal action. But merely opening a joint account does not create such an agreement nor imply it.

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    @Joshua I have been a co-owner of more then one joint bank account in my life. In no case did I enter into any explicit agreement with the other co-owner on who could withdraw how much or for what purpose. Can you cite any law or regulation that requires such an agreement, or any case where a court found such an agreement to be implied? I have not found any such law, regulation, or case. All account holders do have an agreement with the bank, but that in no way covers the rights of one co-owner as against another, and is not the kind of agreement I am talking about in my answer. Jul 10, 2022 at 22:35
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    @DavidSiegel the point Joshua is tiptoeing around is that if you share a bank account with someone you probably have a common understanding of the purpose of that account which could be read as tacit contract.
    – hobbs
    Jul 11, 2022 at 3:31
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    @Hobbs A "common understanding" will in many cases not be construed by a court as an enforceable contract. Jul 11, 2022 at 13:55
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    @Joshua: Spouses routinely do this, although it's not universal. They might or might not have some sort of informal understanding about how money is to be spent, but it will rarely have enough specificity to give rise to a bona fide meeting of the minds under contract law. For example, if both spouses are relatively frugal, the understanding might consist entirely of "be reasonable and pay the bills on time."
    – Kevin
    Jul 12, 2022 at 3:02
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    @Joshua: A marriage probably does not give rise to specific enforceable contractual rights with respect to those commingled assets. A prenup might, but that would be a separate agreement.
    – Kevin
    Jul 12, 2022 at 4:27
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It would depend heavily on your juresdiction and what the relationship between the account holders was.

For example, if the account is owned by a married couple in a state/country with community property laws then there would likely be no criminal or civil recourse unless the money was withdrawn under false pretenses. In which case fraud laws "may" be applicable.

As a rule of thumb, I would say that no action could be taken immediately, through the existence of the withdrawal might be a factor in the division of property after a divorce.

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    What kind of "pretense" is needed to withdraw money from an account, such that there might be false ones? The bank doesn't care why you're withdrawing money, so who would you be defrauding?
    – Barmar
    Jul 10, 2022 at 21:35
  • How does the relationship between account holders factor in? I don't see how it matters if they are spouses, relatives, friends, or business partners - they are joint account owners who both freely agreed to make all the money in the account available to both parties. Jul 11, 2022 at 13:59
  • @Barmar Your "account partner".
    – glglgl
    Jul 12, 2022 at 8:01
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    @NuclearHoagie Did they? They agreed with the bank that both have the right to withdraw money from that account. But regarding their mutual agreements, there might be rules set between concerning what purpose is the money for.
    – glglgl
    Jul 12, 2022 at 8:02
  • @Nuclear Hoagie, because some States have community property laws which would make it much harder to bring any kind of action. Jul 12, 2022 at 12:15

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