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Joint Bank Account Rules on Death

checkbook and tablet with joint bank account on death

There are two types of joint bank accounts in New York: (a) with rights of survivorship; and (b) for convenience. These two types of bank accounts have different rules upon the death of a joint bank account owner.

Joint bank account with rights of survivorship

The most common type of joint bank account is the joint bank account with rights of survivorship. It is the most common type because New York Banking Law § 675 establishes a presumption of joint tenancy with rights of survivorship that when two or more persons open a bank account, making a deposit of cash, securities, or other property. Matter of New York Community Bank v. Bank of America, et. al., 169 A.D.3d 35 (2019).

Joint bank accounts with rights of survivorship rules

In joint tenancy with rights of survivorship, both joint bank account owners have full ownership over the bank account. They can withdraw the entire amount in the joint bank account without the consent of the other. In the same way, a creditor can levy or freeze the entire amount in the bank account for the sole debt of one joint bank account owner (subject to certain income exemptions). When a joint bank account owner dies, the entire amount in the bank account becomes the sole property of the other joint bank account owner. You only need to submit a certified copy of the death certificate of the joint bank account owner (among other documents). This joint bank account with rights of survivorship does not pass-through probate and is not considered part of the estate of the deceased joint bank account owner.

How to establish the presumption of joint bank account with rights of survivorship

Although there is a presumption under New York Banking Law § 675 that a joint bank account is a joint tenancy with rights of survivorship, this presumption arises when you show proof that the joint owners intended to create this type of bank account. This is usually proven by the signature card or ledger that creates the bank account, which should include “words of survivorship.” Absent these “words of survivorship” in the signature card or ledger, no statutory presumption of joint tenancy with rights of survivorship is created with the bank account of two joint owners, and the joint bank account will be considered “for convenience” only.

Joint bank account for convenience

Under New York Banking Law § 678, a joint bank account for convenience is a bank account established by two persons for the convenience of one account owner only.

Joint bank accounts for convenience rules

In a joint bank account for convenience, there are two parties: the joint bank account owner for whose convenience and benefit the bank account was established for (the “principal bank account owner”) and the joint bank account owner who is added for the convenience of the principal joint bank account owner. For example, if you have a bank account, and you add your child to the bank account to assist you with bills payment, check writing, and making deposits and withdrawals, you are the joint bank account owner whose convenience and benefit the bank account was established for and your child is the joint bank account owner who was added for your convenience.

In this type of bank account, there is no right of survivorship. When the principal bank account owner dies, the money in the bank account goes to his estate and not to other joint bank account owner. In the above example, when you die, the bank account does not go to your child but to your estate to be distributed in accordance with your will or New York laws of intestacy, whichever is applicable. As such, the creditors of your child cannot levy your bank account because that joint bank account is considered your sole property and your child has no interest in the bank account despite being a joint bank account owner.

How to establish a joint bank account for convenience

Although there is a presumption that a joint bank account is a joint tenancy with rights of survivorship, this presumption may be rebutted by alleging that it is a bank account for convenience and providing proof that the joint bank account was established for the convenience and benefit of one bank account owner only.

In Viggiano v. Viggiano, 136 A.D.2d 630 (N.Y. App. Div. 1988), the Court held that a joint bank account held by a husband and the husband’s mother was a joint bank account for the convenience of the mother. In that case, the husband’s ex-wife sought to levy the joint bank account held by the husband and the husband’s mother for post-divorce child support arrears. The husband’s mother showed proof that the husband did not have any interest in the account, because the mother maintained sole possession of the bankbook, took possession of all interest earned and paid all taxes due on the interest. In addition, the husband never made deposits or withdrawals from the account. It was the holding of the Court that:

“The burden of proof to rebut the presumption that a joint account was intended rather than a convenience account in that form is upon the defendant husband and his mother (Sherman v Georgopoulos, 84 A.D.2d 811). The facts presented showed an intention to create a convenience account and not to give the defendant husband any interest in the account. Thus, the presumption that a joint account was intended was rebutted (Wacikowski v Wacikowski, 93 A.D.2d 885). Absent any controversion of those facts, the plaintiff wife, as a matter of law (see, Matter of Phelps v Kramer, 102 A.D.2d 908), can no longer rely on the presumptive rights of her ex-husband in the account as a joint tenant.”

Should you need clarification on the joint bank account rules on death, you may contact an estates lawyer who can give you advice on how the law treats joint bank accounts. If you have legal issues regarding a joint bank account, such as a joint bank account owner taking all the money in a joint bank account that was established for the other owner’s convenience only, the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at attorneyalbertgoodwin@gmail.com.