We have an account owned by the husband that has his wife on as an authorized signer. She would like to have her payroll direct deposited to the account. Since she is not the owner, is this permissible? What would happen upon his death or in a divorce action? I think it should become a joint account instead, what do you say?

There is a reason she is not on the account as a joint owner. I wouldn't put the bank in the middle of their potential problems. It's not her account, she is only authorized to act on his behalf on his account. I would not allow the direct deposit.

Agreed. If she is an authorized signer he has the right to remove her from the account at any time. And there her money is in his account... She will want you to fix it.