Do Joint Bank Accounts Create a “Right of Survivorship”?

For this discussion, we are assuming a hypothetical checking account owned by an elderly Widow on which she had recently added the name of her daughter. This daughter, lived locally and was helping Mom keep track of expenses and pay bills. Mom made a will leaving three equal shares to her children, and during life had at all times attempted to treat the children equally. Upon Mom’s death, there remains a significant pile of cash in that account. What are the rights of the daughter/joint account holder vis-a-vis the rights of the other children? The details of the case, and Mom’s intent, matter.

It is commonly believed that when one joint owner passes away, the proceeds of the joint bank account automatically goes to the remaining joint owner. Under New York Law, this is not always the case. New York Banking Law states that a joint bank account creates a right of survivorship only when the signature card indicates the parties intended the right of survivorship to apply. A signature card can also list “for convenience only”, but customers are often not aware of that option. Most often, the signature card lists two or more names, but nothing further.

New York Banking Law Section 675 creates three rebuttable presumptions: (i) as long as both joint tenants are living, each has a present unconditional property interest in an undivided one-half of the money deposited; (ii) there has been an irrevocable gift of one-half of the funds in the account by the depositor to the other joint tenant; and (iii) that the joint tenant has a right of survivorship in said entire joint account upon the death of the other joint tenant.

However, these presumptions may be challenged, with the burden of proof on the challenger. Evidence that may be considered includes the following:

  • What was the intent at the time the account was opened?
  • Why was the account made joint? (to help Mom with her banking)
  • What is the source of funds in the account? (Mom’s social security)
  • Does the joint tenant make deposits and withdrawals for their personal banking? (only at the direction of or on behalf of Mom)
  • Who has possession and control of the checkbook and statements? (Statements went to Mom’s house, but daughter had the checkbook)
  • What was Mom’s intent as to the equal treatment of the children? (3 equal shares under the Will)

The outcome will be case specific – cases could go either way. Here, I believe the factors favor the conclusion that the account was for convenience only and the proceeds should be shared between the children. One would hope that the daughter/joint depositor would “do the right thing” and share the proceeds. You know in reality this is not always the case. Also, this is not a bank issue, and only about property rights between the beneficiaries of the estate.

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