Understanding Joint Accounts
Betterment offers taxable joint accounts so that two people can save and progress toward investment goals together. We’ll answer some of the questions you have about our joint accounts.
TABLE OF CONTENTS
Setting Up Your Joint Account
- What is a joint account?
- Who can I open a joint account with?
- How is it different than just having a beneficiary?
- Can I have more than one joint account?
- How do I open a joint account?
- Who will be the primary account holder?
Using Your Joint Account
- How will our goals be displayed?
- How will fees work?
- Do both joint account owners need to approve actions in the account?
- Can we link more than one checking account?
- Can I transfer between my personal Betterment account and joint account?
- Can I have an IRA in a joint account?
- Will I still be able to use Tax Loss Harvesting+?
- How can I close my joint account?
What is a joint account?
Our joint accounts enable two people to save and progress toward investment goals together. Both holders in a joint account have joint ownership of the assets in the account and are able to create goals, transfer funds from the linked checking account, make allocation changes, and view the account.
We only support joint accounts with rights of survivorship. This means that upon the death of either owner of the joint account, the ownership of the account goes to the surviving joint account holder.
Who can I open a joint account with?
Joint accounts can be created with any other Betterment customer, and you do not need to be married. If you want to create a joint account with someone who is not a Betterment customer, they must first open an individual Betterment account. There is no obligation to fund the individual account if they simply want to use the joint account that’s created after. The individual account can even be closed once the joint account is set up.
How is it different than just having a beneficiary?
Two customers with a joint account have dual ownership of the assets in the account. Each owner can transfer money, create goals, change allocations, and more. Upon the death of one of the joint account owners, the assets are transferred to the surviving account owner.
On the other hand, a beneficiary does not have access, control, or ownership over the account while the account owner is alive. Upon the death of both of the joint account holders, the assets are transferred to the beneficiary.
Click here for instructions on how to add beneficiaries.
Can I have more than one joint account?
You can only have one joint account at a time. Should you ever need to open a new joint account with a new person, you can simply close your old one.
Note that while you can only have a joint account with one person, you can set up multiple taxable investment goals within that joint account.
How do I open a joint account?
First, create an individual Betterment account. Remember, you do not have to fund your individual account, and you can delete it afterwards without any fees or penalties. After you’ve created your individual account, follow the steps below to create a joint account.
- Log in to Betterment, either on a web browser or your mobile app.
- Click “Add New” from the menu if on a web browser, or “Add goal/account” if on the mobile app.
- Follow the on-screen prompts.
- An email invitation will be sent to the joint account holder, so give them a head’s up.
Who will be the primary account holder?
The account holder that opened the joint account is designated as the primary account holder. To see who the primary account holder is, log in and navigate to Settings > Accounts.
We aren’t able to transfer primary ownership of a joint account once it’s been created. However, remember that a joint account is legally owned by both parties associated with the account. The IRS requires only the primary account holder be listed on tax statements.
The primary account holder, which is the person who originally created the account, will receive the 1099-B and/or 1099-DIV associated with the joint account. Integrations with tax preparation software will only work with the primary account holder’s Betterment account.
We cannot change the primary account holder on a joint account. Since Betterment is not a tax advisor, we highly recommend consulting with a tax professional for further questions regarding how to file your taxes in a joint account.
How will our goals be displayed?
You’ll each log in with your own email address and password. You’ll see any of your individual goals alongside your joint account goals when you log in. You will not be able to see each other’s individual goals.
How will fees work?
Like an individual account, Betterment’s fee will be based on your joint account’s balance. Betterment offers automatic householding for customers who open joint accounts, which combines your balances and can be beneficial for the purposes of meeting minimum balance requirements for our various plans.
Do both joint account owners need to approve actions in the account?
Most actions do not require consent from both customers. These include closing the account, deposits, withdrawals, most types of transfers, creating new goals, allocation changes, changes to the linked checking account, and beneficiary changes. Both account holders will receive email notifications any time a deposit, withdrawal, transfer, or allocation change occurs.
Can we link more than one checking account?
You can only link one checking account to your joint account at a time. The ability to link multiple bank accounts may be something we offer in the future.
Can I transfer between my personal Betterment account and joint account?
You can transfer non-IRA assets from a personal account into a joint account without authorization from the other account holder. Simply email us after you have created both types of accounts and we’ll get you started on this process.
However, to transfer assets from a joint account into a personal account, notarized signatures are required from both account holders in the joint account. Please email us to get started.
Can I have an IRA in a joint account?
No. Because IRAs are Individual Retirement Accounts they can only be held in your individual Betterment account.
However, you can have both a joint account and an individual account. This will allow you to create non-IRA goals in your joint account, while keeping your IRA in your individual account.
Will I still be able to use Tax Loss Harvesting+?
If your joint account is with your spouse and you file your taxes jointly, you can enable TLH+.
When you enable TLH+ on your Betterment account, you’ll be asked for your spouse’s account information so that we can look across both your accounts for opportunities to harvest losses, while seeking to prevent wash sales in your Betterment accounts. If you already have TLH+ turned on, you’ll need to turn it off and set it up again to include your spouse. Learn how to enable TLH+ across you and your spouse’s accounts here.
For more information on TLH+, please click here.
How can I close my joint account?
Either joint account holder can close the joint account.
Log in from a web browser and navigate to Settings > Accounts. Click the three dots towards the right of the account you are looking to close, and select “Close Account”. There are no trading fees or penalties for closing accounts.
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