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Most couples hold at least one bank account jointly. If it is held “joint with right of survivorship,” 100% will pass to the surviving spouse on presentation of a death certificate. The difference is important.Preview (opens in a new tab)

When one spouse dies, the survivor still has bills to pay. In fact, there are even more bills: bills associated with the final illness, the funeral, the probate of the estate.

Anything which passes “joint with right of survivorship” or “pay on death” or “transfer on death” or under a Transfer on Death or Lady Bird Deed is not part of the probate estate. It might even be possible to avoid probate altogether even without using a trust.

What happens when there is one spouse left? Should that spouse’s bank accounts be held joint with right of survivorship with a child? No! Never! That would expose 100% of the account to the risks of the child’s creditors, to allocation to the child’s spouse in a divorce, to scamsters and hackers of the child’s information.

There are two useful alternatives.

  1. In Texas, an account can be held with a “convenience signer.” This allows the child to sign checks, but only for the convenience of the parent. All the funds remain those of the parent, safe from any mischance which may visit the child.
  2. If the child is the parent’s agent under a Durable Power of Attorney, this is not even needed: take the Durable Power of Attorney to the bank and have a notation made on the account so that the child can access the funds on behalf of the parent.

Either of these approaches can be combined with labeling the account “pay on death” to whomever you wish. It could be “pay on death” to more than one person and in whatever portions you wish.

Holding your bank accounts properly can help protect your money while making sure that it passes to the people you plan, all without the need for probate – at least with regard to the bank accounts.


More resources: 
When you are gone, do you know what your family will need? What will your family need when you die?
Joint with right of survivorship may not be best approach in some situations. When shouldn’t you hold things jointly?


Elder law attorney, Terry Garrett, CELA, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.

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