Personal Banking is one of those things that is just that – it’s personal. You may start down a particular path at a young age and the course is set, never to change. However, if you’re like most, life circumstances change. Whether it’s geography, marital status, building a family, starting a business or some other milestone, there are moments in life that give us pause when it comes to finances. Marriage is one of those milestones.

How to know which way to go

How does one know which account ownership direction to take when ‘tying the knot?’ One way – talk to your personal banker. Visiting with your banker, you can figure out the vision for how you want your accounts to work over the course of a lifetime, lay out the options and then to make a decision on ownership.

Know the options

The options are important largely because they determine who receives the proceeds of the account upon death, but also because they determine, in part, how you’ll bank as a couple. So, what are the options? At-a-glance, here are five of the most common account ownership types with a brief description of each.

5 types of account ownership

1. Individual – an account owned by one person. The owner may authorize another individual to transact on their behalf as an authorized signer. Upon the death of the account owner, the funds are paid to their estate.
2. Joint Account with Right of Survivorship – an account in the name of more than one person. Either spouse can make deposits and withdrawals at any time. Upon the death of one spouse, the account passes directly to the survivor.
3. Joint Tenants in Common – a co-owned account in which, upon the death of the spouse, the surviving tenant of the account does not necessarily acquire the rights and assets of the deceased. Each will have a 50% claim on the account and assets of the deceased will be distributed according to a will.
4. Payable On Death – This account is simply an individual account with a twist. Probate is avoided by the presence of named beneficiaries, who hold rights on the account only upon the death of the account holder(s).
5. Revocable Living Trust – also known as ‘family trusts’, ‘living trusts’ and ‘trusts under agreement’, these are legal documents. Usually used later in life, a trust gives control and management of assets to a trustee (who might also be the grantor). There are probate, succession and other legal considerations that make it a unique form of ownership.

To get the full picture, talk to your personal banker. With this bit of technical knowledge, plus knowledge of your own situation, you’ll be well-armed. Speaking of your own situation…

Know thyself

As a couple, how do you want to bank today? It pays to admit who you are and what you like when it comes to banking. As you think about the account ownership types and which is right for you, you can work with your personal banker to figure it out. You’ll want answers to personal style questions like complexity and change. And you’ll want answers to banking questions like ownership, access rights and worst-case scenarios should something unforeseen happen.

The answer to these questions may rest in your recent banking and life experience. If you owned a business, a home or significant investments, or if you’ve been banking for a long time ‘pre-marriage’, for example, you may have more to consider. If you haven’t set up a Last Will & Testament, it’s a good idea to do so. (Even if you’re a young couple, it’s an adult thing you can do together and will support your banking decisions.)

Crystal Ball: What is next?

You might not know what is next. It can influence your decision on whether to go joint or keep accounts separate. If you have kids coming into the marriage, for instance. Or if you have no kids, but hope to soon. These variables can affect your sense of what feels right. If you intend to purchase a home or start a business, this can change things. Many of these changes in life circumstances can not only change the complexion of life but also your finances in terms of taxes, credit, ability to save and in other ways. Looking down the road – you may be taking care of your spouse.

Some of this might seem obvious or like marriage-counselor-speak, but it might not be so obvious if you’ve grown accustomed to doing what you want with your money and haven’t had to consider a partner in the process. It’s important to acknowledge each other, understand prior relationships to money, talk about current and future goals, and work together to figure out a plan of attack for account ownership – with the willing and able support of your personal banker of course!