Family limited partnership Vs. Joint bank account

This section of Family limited partnership information website discusses family limited partnership Vs. Joint bank account. When tax payers go to a bank to open bank accounts, they are often asked by the bank what type of bank accounts they want to open. Many tax payers open a joint bank account for them and their spouse for convenience. However, is opening a joint bank account a good thing?

What happens when I get sued if I have a joint bank account?

A joint bank account is probably one of the worst set up of ownership you can have when it comes to lawsuits and creditor protection.

Single bank account

If a tax payer has a single bank account, when the tax payer gets sued, the tax payer will lose that single bank account.

Joint bank account

If the tax payer has a joint bank account with his or her spouse, however, the tax payer stands to lose that joint bank account if any of the two cases occur:

1. the tax payer get sued in a lawsuit.
2. the tax payer 's spouse get sued in a lawsuit.

So, having a joint bank account is twice as risky as having a single account when it comes to lawsuits.

Family limited partnership is the only protection against lawsuits

Putting your money or assets in a single bank account or a joint bank account will not protect you again any lawsuits. How about putting your assets in other types of legal structures? Putting your assets in a trust such as a living trust (revocable living trust or irrevocable living trust) will not help either. The only way you can protect your assets against lawsuits when you get sued is by putting those assets in a family limited partnership.