Who Owns Your Bank Account?

Do you know who owns the money in your bank account when you die? The forms you filled out at your bank when you opened your account may very well determine who owns the funds in your bank account upon your death. Unfortunately, many of us don’t remember how we filled out that bank card when we opened the bank account, and some of us may not have understood the consequences of checking one box instead of another. This blog will discuss who owns your bank accounts under the three types of joint accounts.

Three Types of Joint Accounts

There are 3 basic joint accounts in Texas.

Tenants in Common. When one of the account owners die, then the surviving owner is only entitled to their share of the account. The deceased’s share passes through his will.

Convenience Account. The account owner names another person on the account so that person is authorized to write checks and make withdraws on behalf of the owner. The non-owner does not inherit any part of the account when the account owner dies. Instead, the entire account passes through the will of the deceased owner. You may see this when an older parent wants their adult child to pay bills using the parent's bank account.

Joint account with (or without) a Right of Survivorship (“ROS”).

With Right of Survivorship

If there is a ROS, then the surviving account owner has a right to the entire account. None of it will pass through the will of the deceased.

The forms you complete at the bank will determine whether the account has a ROS. If the form you signed meets the statutory requirement to create a ROS, then the other person on your account will own all the funds upon your death.

Texas Estates Code §113.151 explains that to create a ROS, the agreement must contain a statement substantially similar to the following: “On the death of one party to a joint account, all sums in the account on the date of the death vest in and belong to the surviving party as his or her separate property and estate.” However, banks have been known to favor their own forms and unfortunately those may unintentionally fail to meet the statutory requirements to create a ROS. All accounts are presumed to not have a ROS, so the burden of proof is on the person claiming that the account is a survivorship account. Therefore, it is very important to read the forms closely.

Without Right of Survivorship

If there is a joint account without the survivorship clause, then during the life of the account holders each party owns a proportion of the funds equal to their contribution. Upon the death of one of the account holders, the surviving owner is only entitled to their share, while the deceased owner’s share passes through his will.

Contact Us For Help

Now that you know the consequences of checking boxes on the card when you opened your bank account, it may be wise to ask the bank about your account. At the Law Office of Hugh Spires, Jr. we can help you decide what account best meets your needs. You can contact us through www.TexasWillsLawyer.com.