Sunny side of joint accounts

Joint bank accounts are emerging as a common option for couples towards building family investments, writes HAROLD AYODO

With education and economic empowerment, many women today earn good money and can survive financially on their own if they so desire. But just when you would think married women would prefer to retain their individual accounts, sociologists claim an increasing number of couples are embracing joint bank accounts.

Economists and financial analysts concur that pooling together resources between trusting couples increases their chances of investing in successful ventures. Similarly, researchers note that shared bank accounts are more popular among young couples below the age of 45, compared to their older counterparts.

Susan and Patrick Maina is one such couple. They resolved to operate a joint bank account before tying the knot five years ago.

"We were both blessed with jobs in international organisations that earned us modest salaries every month," Susan says.

Soon after their salaries have been credited into their shared bank account, Susan and Patrick discuss expenses.

"We are currently servicing a mortgage we took two years ago for the apartment that is our family home in Kileleshwa," Patrick says.

According to him, pooling money together has more advantages than disadvantages, and it builds trust.

"I always believed that a married couple should not only share ideas but resources, too, whether both spouses are working or not," Patrick quips.

Talanta Africa Media and Telecommunications CEO Gor Semelang’o concurs with Patrick.

"I do have a joint account with my wife as it promotes openness and discourages misuse of resources as you are answerable to your spouse," Gor says, adding that the facility removes suspicion that a spouse is earning more money than he or she truly is.

"Financial openness leads to trust and understanding amongst couples in this era where both spouses earn salaries," Gor says.

Secret savings

However, it is not uncommon to find couples that maintain a joint account but still keep secret bank accounts on the side. But Gor, who is also the director of the Youth Enterprise Development Fund, dismisses secret savings among spouses.

"This will lead to a waste of resources. Should one of the spouses die, then those savings will go to waste or be left at the mercy of the public trustee," he says.

Ironically, such secret savings of the deceased spouse may be labelled unclaimed yet the surviving family continues to operate on a shoestring budget.

A report reveals that about Sh200 billion worth of assets are still unclaimed in the financial system, corporate firms and utilities institutions.

The survey by the Retirement Benefits Authority and the Unclaimed Property Asset Register found that different institutions held the investments as of 2008. The unclaimed assets range from bank deposits to dividend cheques, shares, retirement benefits, insurance premiums and, more recently, virtual money held in mobile phones by deceased persons.

Pension funds

Of the Sh200 billion, approximately 45 per cent is being held by commercial banks and 25 per cent by insurance firms, while pension funds hold about Sh40 billion.

Others include shares held at the Nairobi Stock Exchange and utility deposits to service providers such as Kenya Power and Light Company and Nairobi Water Company.

Legally, the Government has no policy on the management of unclaimed assets, which is a growing concern as spouses die with secret investments. The chairman of the Institute of Certified Public Secretaries of Kenya, Joe Mbuthia, recently recommended disposal of the unclaimed assets.

"Unclaimed assets should be held for seven years by the holding company before remission to an Unclaimed Assets Trust Fund (UATF) for 15 years," Joe said, further recommending that the unclaimed investments in the UATF should ultimately be assigned to the national budget.

According to Federation of Women Lawyers – Kenya (Fida) deputy executive director and head of programmes Claris Oganga-Onyango, shared accounts are welcome.

"A joint bank account is the most common option for married couples. It makes it easy to budget the finances of the family," Claris says, adding that shared resources encourage transparency in a relationship, especially in regards to money.

Beneficial

For instance, it allows a couple to share the payment of bills without deciding who has to settle specific expenses.

"A joint bank account can be beneficial to a housewife whose husband has allowed her access to his money," Claris says. "Joint accounts also make it easier for the couple to invest in family projects and other investments, and to secure mortgages from banks and other financial institutions due to higher savings made."

Legally, shared accounts are important because when a spouse dies, the surviving partner can access the money without undergoing succession cases in court.

"When one spouse owes money, the savings maybe used to recover the debt, regardless of how much each partner owned," Claris explains.

The script would be similar if one partner is subject of a lawsuit and creditors request the court to offset the amount with money in the joint account.

However, there are disadvantages to shared accounts.

"Apart from losing financial freedom, trust becomes a key issue when a couple has a joint account as it is easy for one to withdraw all the money in the account without consulting the other, especially when the relationship turns sour," says Claris.

"Having joint accounts is a choice and couples must have proper discussions about it before venturing into it," Claris warns.

"Money issues can lead to arguments and misunderstandings, which can lead to a breakdown of a once glowing relationship."

Caroline Ogot, a women’s economic empowerment activist, believes joint accounts are not always a good idea.

"Shared accounts may interfere with the financial independence of a woman," says Caroline.

According to her, most women still feel the need to consult their partners before withdrawing and spending money from the joint account.

Interestingly, that feeling is not shared by some men who have no qualms about withdrawing funds without consulting their partner.

Caroline feels that spouses should have separate roles and manage their own money should a dispute that rocks their marriage arise.

"At what stage will the woman prove she deposited colossal amounts when problems arise?" Caroline poses.

"Joint accounts kill the dreams of both spouses. Anytime a man learns that his wife has investments elsewhere, his financial support dwindles, and he could even fight to disable her security. However, when a woman has her own account, she feels more empowered and her self-esteem is boosted. She should also invest wisely for the benefit of her children," Caroline says.

Nevertheless, Caroline feels that secret bank accounts are not a good idea amongst married couples as it compromises trust between them.

"It is good to invest but let your spouse know about it to uphold the trust. When trust is compromised, almost all is lost," Caroline warns.