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- Joint bank account owners have full access to the funds at any time.
- Typically if one bank account owner dies, the surviving owner gets sole control of the account.
- Consider whether it's better to add a beneficiary instead of opening a joint account.
Introduction
Opening a joint bank account is different from opening up an individual bank account. Both owners have full access to a bank account, and joint bank account rules also dictate specific actions if one owner dies.
We'll walk you through the rules on survivorship and guide you through possible alternatives to consider if you decide you don't want to open a joint bank account.
Overview of joint bank accounts
Joint bank accounts are checking or savings accounts owned by two or more people. Here are the main features:
- Debit card access: For checking accounts, each person can receive a debit card tied to the account.
- Right to funds: Each person has the right to contribute to and withdraw money from the account without obtaining consent from the other account owners.
- Joint liability: Co-owners of a joint account are generally responsible for all fees, overdrafts, and financial obligations.
Rights of survivorship
When you're opening up a new bank account, you'll receive a bank account agreement that lists the bank's conditions and rules. Many banks have a rule of survivorship in their joint bank account agreement.
The rule of survivorship states if you open a joint bank account and one person dies, the surviving owner automatically takes over the account, superseding any instructions outlined in a will.
Sophia Bera Daigle, CFP® professional and founder of Gen Y Planning, says it doesn't matter whether the deceased owner put in more money — the account would still go to the surviving owner.
"If you have $20,000 in a joint bank account with your boyfriend — you put in $18,000, and he's only put in $2,000 — and you pass away, that account is not going to your family. It's going toward your boyfriend," says Bera Daigle.
If your financial institution doesn't specify rules on survivorship, consider naming the surviving owner as beneficiary instead. The funds would still transfer directly to the survivor, though it may not happen as quickly.
Insurance coverage
FDIC insurance protects up to $250,000 per depositor per institution in the event of a bank failure. That means joint accounts owned by two people are protected up to $500,000.
If the co-owner of a bank account dies, however, their insurance coverage amount is no longer applicable.
Steps for the surviving account holder
1. Notify the bank
Call your bank's customer service line and ask to speak to a representative.
As the surviving account owner, you typically must present a death certificate and other supporting documentation to the financial institution. You should not lose access to the account during this time if there is a right of survivorship.
2. Manage the deceased person's debts
Accounts that transfer by right of survivorship may not be fully protected from creditors of the deceased person, depending on local laws where you live. A joint account is usually considered part of the estate, so creditors may be able to seek collections for solely or jointly owed debt.
Legal and financial considerations
Think carefully about who you open a joint bank account with. Bera Daigle doesn't recommend joint bank accounts for unmarried couples, since there could be significant differences in the way both people manage money.
"If one of the owners got into some credit card debt and wanted to use that joint bank account to pay off the credit card debt, there's really nothing that the other account owner can do," says Bera Daigle.
Bera Daigle also notes that joint bank accounts may not be ideal banking options for family members. "I've seen it go both ways. The parent being irresponsible or the child being irresponsible with that money," she says.
Instead, she recommends assigning a bank account beneficiary in these circumstances. A joint bank account beneficiary can't set up direct deposits, make withdrawals, or view your bank account when you're alive. They may only access the account when you die.
If you're a joint bank account owner who wants another person to have access to your account while you're alive, you might consider adding an authorized signer to your account.
FAQs
What happens to a joint bank account when one owner dies? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Most joint accounts come with a right of survivorship, in which the survivor becomes the sole account owner automatically.
Do I need to provide any documents to the bank if my joint account holder dies? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.When informing the bank of a co-owner's death, you will need to provide a copy of the death certificate. In some cases, the financial institution may require specific tax and financial documents.
Are there any tax implications for the surviving account holder? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.There may be, depending on where you live and the size of the account. In general, though, inherited bank accounts are not considered taxable income to the recipient.
Can the deceased's creditors claim debts from the joint bank account? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.It depends on local laws, but generally creditors have the ability to seek debt repayment from a joint account.
What should I do if I'm the surviving co-owner of a joint bank account? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.Surviving co-owners should contact their bank immediately to retitle the account and consider meeting with a local financial advisor or attorney to understand possible estate and tax implications.
Sophia Acevedo Banking Editor Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circumstances and overcoming their fears around money.ExpertiseSophia's expertise includes:- Bank accounts
- Savings and CD rate trends
- Budgeting
- Saving
- How banks operate
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