The surviving owner of a joint bank account typically owns the money in the account.
Here's how this works:
- Joint Tenancy with Right of Survivorship: This is the most common type of joint account. When one owner dies, their ownership interest automatically transfers to the surviving owner(s). No probate is required, and the surviving owner(s) can continue to access the funds.
- Tenancy in Common: This type of joint account allows each owner to specify a percentage of ownership. When one owner dies, their share of the account goes to their beneficiaries, not the surviving owner.
Important Considerations:
- State Laws: Laws governing joint bank accounts vary by state. It's always best to consult with an estate planning attorney to ensure your account is set up according to your wishes.
- Will: A will can override the default ownership rules of a joint account. For instance, a will might specify that a portion of the account should go to a beneficiary other than the surviving owner.
Examples:
- Scenario 1: John and Mary have a joint bank account with right of survivorship. If John dies, Mary automatically becomes the sole owner of the account.
- Scenario 2: Sarah and Tom have a joint account with right of survivorship. However, Sarah's will specifies that her share of the account should go to her daughter, Emily. In this case, Emily would inherit Sarah's share of the account, even though Tom is the surviving owner.
Practical Insights:
- Joint accounts can be helpful for couples or family members who want to share access to funds.
- It's important to understand the ownership implications of joint accounts before opening one.
- Consult with an attorney to ensure your account is set up in accordance with your wishes.
