How JOINT ACCOUNTS Can Easily Become a NIGHTMARE

There is this thing about joint accounts that people, especially couples, mistake for romantic, sweet, or couple goals, but they don’t realize it is a ticking time bomb. Haven’t you heard how people equate having joint accounts as goals for many, or at times refer to something as he trusts her so much that all their money comes to a joint account where they spend together?

It sounds all rosy until you hear the story I want to share with you in this video of a power couple I met two years ago. By no means am I killing your vibe and expectations with your better half, but I wish to enlighten you on something very important about joint accounts that I think everyone needs to know before it is too late to fix.

The Joint Accounts Story

This is a true story that caused me to meet a remarkable couple. One day, a man in his late 40s came to my office, and his purpose was to consult about a retirement package. He was concerned that he had not yet made a plan on how to deal with finances when he will retire. This couple were so close and seemed to know almost everything about each other. By the way, including money. They were doing fairly well financially.

To cut a long story short, I helped them set up a befitting retirement plan. And not just that, but I also incorporated a protection cover. This ensures that whatever happens to either of them, they do not suffer financial loss. I must say that this was not part of their plan. But out of experience, I figured out a risk gap, but that will be a story for another day.

Barely 2 months after the office visit, the wife called me. I thought it was just a usual call, but it’s perhaps the saddest call I have ever received. “He is gone.” Those were her words. I have never been so heartbroken. A few months later, reality starts to strike. Kids need to go back to school, bills need to be paid, and business deliveries need to be paid for as well.

Reality Check

And here is where the rubber starts to meet the road. All invoices to their business were paid to the company account, which had both of them as joint signatories. Their expenses were being financed from a joint account. They only had “dummy” accounts that used to receive a salary from their company as directors, which wasn’t enough to sustain anything but for tax advantages and conveniences. In short, what I’m saying is that everything about money was in joint accounts.

This meant that, although they had substantial money in the company accounts, fixed deposits, and home accounts, none was accessible. But here is the miracle. Her life and business managed to go on, and I will briefly tell you the secret behind that.

How Joint Accounts Work

When we talk about how joint accounts are designed, it is important to know that, unless there are signatures from both the account holders, you won’t be able to do any transactions. This means that you either have to wait for the other person or, if they are dead, you need to sue them. This is because of something called the law of succession. In Kenya, this is quite a lengthy process full of some challenges. Especially moral ones driven by greedy parties. I explained in length the process and challenges of going through this stressful process in this video right here, and I will leave a link in the description below. it is a must-watch. Don’t be caught unawares.

So what are the solutions to this Joint Account Problems?

I’ll give three quick ones:

1. Have separate accounts with substantial funding. which is quite unlikely but is a great option.
2. Have joint accounts whereby anyone can transact without the other. and by all means, I think this is where trust and true love abide. In the event of sudden loss or demise of your partner, you can still move on with life financially
3. Finally, the secret hack that saved this widow’s life was to have a life or wealth protection plan. Remember the gap I noticed earlier when they came to my office? I thank God they followed my advice.

Conclusion

She received her Ksh.3million, and as she goes through the law streets to finally get access to all their accounts, she has food on the table, bills paid, and her family lifestyle preserved. It’s been a couple of years now, and the succession process is still underway.