When a loved one dies, who was also a joint account holder, access to the funds in that account can quickly become a concern. For joint bank accounts, the answer often depends on the account agreement, how the owners titled the account and the law that applies to the account. In many cases, a joint account with survivorship rights may allow the surviving owner to take control of the funds without probate.
How survivorship rights work
Banks often set up some joint accounts with a right of survivorship. When that feature applies, the surviving owner may become the sole account holder after the other owner dies. In New York, a joint account set up with survivorship rights may transfer to the surviving owner. Banks may still require a death certificate or other documentation before updating the account records.
Funds in a joint account with survivorship rights often pass outside probate, though the outcome depends on the specific account terms and applicable New York law. Disputes can still arise if there is evidence that the account was set up differently than expected.
When problems can arise
Not every joint account works the same way. Some accounts may be set up so each owner’s share passes through the owner’s estate rather than to the surviving account holder. Depending on the account structure and applicable law, creditors may have a claim to some or all of the deceased owner’s share. Tax consequences may also depend on the size of the estate. New York has its own estate tax that may apply independently of federal estate tax, depending on the value of the taxable estate. An estate planning attorney can provide guidance specific to the estate’s situation.
Why reviewing account records matters
Clear account records can make it easier to avoid disputes after a death. An attorney can review the account paperwork and explain how the funds may transfer. If you are unsure how you titled a joint account, review the account documents before a problem arises.
