Joint checking account. What happens when one person dies?

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tc101
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Joint checking account. What happens when one person dies?

Post by tc101 »

If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
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Bobby206
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Re: Joint checking account. What happens when one person dies?

Post by Bobby206 »

tc101 wrote: Fri Jul 23, 2021 7:31 pm If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
Yes. If it's a true joint account and not a "bank power of attorney" which is totally different.
Trader Joe
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Re: Joint checking account. What happens when one person dies?

Post by Trader Joe »

tc101 wrote: Fri Jul 23, 2021 7:31 pm If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
Yes, most definitely.

The joint checking account survivor retains 100% use of the account and 100% of all of the money in the account.
oyster99
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Re: Joint checking account. What happens when one person dies?

Post by oyster99 »

Depends what the bank records say about the account. I think it's safe to say that generally speaking, two-person joint accounts (in the most general case, non-spouses) have rights of survivorship for the surviving joint owner. In that case, the survivor has more than just access to the money, it will become their money after they inform the bank of the death and produce a death certificate and whatever else the bank requires.

Do the monthly statements for the account list both names and say anything about right of survivorship (there may be an acronym JTWROS listed on the statements)?

In some (most?) states, state law presumes a joint bank account has rights of survivorship unless it is explicitly disclaimed in the T&C (terms & conditions) of the account. So if the T&C say nothing about rights of survivorship, state law clarifies.

You'll have to call the bank anyway at some point (to notify of the death), so the definitive answer will come from calling the bank (or going in, in person, if a brick and mortar bank). If there is an executor or trustee for this person's estate, this account is not administered by them, so the surviving joint owner will have to be the one to notify the bank.

PS if the joint owners were spouses, the surviving spouse should still notify the bank of the death and get it re-titled in just their name, and possibly add beneficiaries. If the lone surviving spouse passes away later and it is still titled as a joint account in both names, it can potentially get messy to clean up by their executor/trustee, depending how difficult the bank wants to make it.
bluegill
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Re: Joint checking account. What happens when one person dies?

Post by bluegill »

I am uncertain about what I am writing.
There exists a situation where a checking account owner grants signature authority to another person. This signator is not a joint owner, but they can write checks on the account.
doobiedoo
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Re: Joint checking account. What happens when one person dies?

Post by doobiedoo »

tc101 wrote: Fri Jul 23, 2021 7:31 pm If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
Yes. My Joint [With Rights Of Survivorship] accounts were the only ones that kept the same account numbers when my spouse died.
All the other accounts with my spouse's name on the title got closed and re-opened with new account numbers and different title.

To be honest, most financial institutions won't know that your spouse/parent/etc died until you tell them. Once they know the person is deceased, the institution is legally obligated to change the title and access, if the account is not Joint Tenants WROS.
mptfan
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Re: Joint checking account. What happens when one person dies?

Post by mptfan »

doobiedoo wrote: Sat Jul 24, 2021 2:11 pm To be honest, most financial institutions won't know that your spouse/parent/etc died until you tell them.
That's not my understanding. There is a master death file maintained by the social security administration and they are notified of deaths by funeral homes and hospitals and other facilities, and some financial institutions and insurance companies check the master death file on a regular basis. Is my understanding wrong?
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Kenkat
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Re: Joint checking account. What happens when one person dies?

Post by Kenkat »

mptfan wrote: Sat Jul 24, 2021 2:23 pm
doobiedoo wrote: Sat Jul 24, 2021 2:11 pm To be honest, most financial institutions won't know that your spouse/parent/etc died until you tell them.
That's not my understanding. There is a master death file maintained by the social security administration and they are notified of deaths by funeral homes and hospitals and other facilities, and some financial institutions and insurance companies check the master death file on a regular basis. Is my understanding wrong?
You are correct. I work in the financial services industry and we run the social security death master (as we call it) against all customer accounts monthly.
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dcnut
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Re: Joint checking account. What happens when one person dies?

Post by dcnut »

I was the joint owner of a bank account with my father. After his death, I mentioned this fact to the bank manager, and I was explicitly told to leave his name on the account for several months. The reason for this is that the decedent will often receive "nuisance" checks which can still be deposited into the joint bank account without his signature. I found this to be very useful advice, as we did get one or two such checks. By the way, this bank branch was located inside the CCRC where Dad lived, so they deal with this issue all the time
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BolderBoy
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Re: Joint checking account. What happens when one person dies?

Post by BolderBoy »

bluegill wrote: Sat Jul 24, 2021 4:41 am I am uncertain about what I am writing.
There exists a situation where a checking account owner grants signature authority to another person. This signator is not a joint owner, but they can write checks on the account.
My mother had such an account - she was the joint owner along with my father. I was added as a signer (but not a joint owner) on the account after my father died. As mom approached her own death many years later, I gradually moved most of the money from her checking account (with her permission) to another checking account I jointly owned with my sister so that we could take care of estate matters. After mom's death the POD aspects of her account were exercised to empty and close the account with my sister and I dividing the remaining (rather small) balance.
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heartwood
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Re: Joint checking account. What happens when one person dies?

Post by heartwood »

tc101 wrote: Fri Jul 23, 2021 7:31 pm If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
Our experience relates to non-death situations so far. We've been learning that what we think are joint accounts are in fact accounts with a primary SSN and the other person is authorized to use the account.

This first came up with our Fidelity joint CMA account using my SSN. Both names are listed on the monthly statements. However my wife is only authorized on the CC associated with the account. The card has her name on it. It does not link to her credit history.

We've read that in such a case her card would be cancelled at my death. She's recently started obtaining cards where she is the account owner, both to broaden her own credit files and also insure access to credit in future.

Will someone opine on "joint" accounts (checking, credit card, other) that are under one SSN and the other party is authorized? What needs to be clarified?
Swimmer
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Re: Joint checking account. What happens when one person dies?

Post by Swimmer »

One thing I haven’t seen mentioned is inheritance tax. My mother and I held a joint account. When she passed, I had to pay inheritance tax on her 50% of the account. This was in Pennsylvania and would depend on the individual state inheritance tax law. In this case it was 4.5% with no exclusion.
bac
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Re: Joint checking account. What happens when one person dies?

Post by bac »

Swimmer wrote: Sat Jul 24, 2021 5:55 pm One thing I haven’t seen mentioned is inheritance tax. My mother and I held a joint account. When she passed, I had to pay inheritance tax on her 50% of the account. This was in Pennsylvania and would depend on the individual state inheritance tax law. In this case it was 4.5% with no exclusion.
My sister and I added each other as signers (or so we thought) on our respective checking accounts. When she died, I soon told my bank (a mistake, in hindsight) and it froze half the balance in my checking account because it termed her a co-owner and that money would have been subject to the now-repealed estate tax. Fortunately, I didn't need the money (probably around $13,000) and the account was paying decent interest. I've since added a niece as a signer via the bank's own PoA form.

My sister's bank, in the same state, didn't freeze a dime, either in her checking account or a linked money market account that had something like $200,000 in it.

It all got sorted out on the estate tax return where my account specified she was on my account solely for convenience (and it was clear her assets were kept elsewhere).
cbeck
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Re: Joint checking account. What happens when one person dies?

Post by cbeck »

dcnut wrote: Sat Jul 24, 2021 2:46 pm I was the joint owner of a bank account with my father. After his death, I mentioned this fact to the bank manager, and I was explicitly told to leave his name on the account for several months. The reason for this is that the decedent will often receive "nuisance" checks which can still be deposited into the joint bank account without his signature. I found this to be very useful advice, as we did get one or two such checks. By the way, this bank branch was located inside the CCRC where Dad lived, so they deal with this issue all the time
And yet you can read many accounts of authorized users of a credit card who continue to use it for years after the cardholder dies with the bank none the wiser. Do the banks check the obits only for depository accounts and not credit cards?
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anon_investor
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Re: Joint checking account. What happens when one person dies?

Post by anon_investor »

heartwood wrote: Sat Jul 24, 2021 5:20 pm
tc101 wrote: Fri Jul 23, 2021 7:31 pm If two people have a joint checking account, and one of them dies, does the one who is alive still have access to all the money in the account?
Our experience relates to non-death situations so far. We've been learning that what we think are joint accounts are in fact accounts with a primary SSN and the other person is authorized to use the account.

This first came up with our Fidelity joint CMA account using my SSN. Both names are listed on the monthly statements. However my wife is only authorized on the CC associated with the account. The card has her name on it. It does not link to her credit history.

We've read that in such a case her card would be cancelled at my death. She's recently started obtaining cards where she is the account owner, both to broaden her own credit files and also insure access to credit in future.

Will someone opine on "joint" accounts (checking, credit card, other) that are under one SSN and the other party is authorized? What needs to be clarified?
I think most CCs are not joint accounts, just 1 account owner and authorized users. For that reason my spouse and I make sure to keep different CCs under our own name with the other spouse as an authorized user.
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RickBoglehead
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Re: Joint checking account. What happens when one person dies?

Post by RickBoglehead »

At time of death, when the financial institution learns of the death (often by being sent a death certificate), they may lock the account while they transition it to a sole owner account. Or they may simply remove the deceased's name from the registration.

You should plan on a few days of inaccessibility. In other words, move funds to a solo owned account, then notify the institution.

Vanguard (not a checking account) will freeze the account, and open a solo brokerage account, and transfer assets. This will take days.
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techiegirl
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Re: Joint checking account. What happens when one person dies?

Post by techiegirl »

My husband and I only had joint bank accounts. I did not close the last one until a year after he died, and the bank never knew that he had passed away.

As for credit cards, we did have a joint credit card (along with a bunch of individual ones). That bank removed his name from the card, but I was still responsible for the balance. I still have the card today.
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