What are Jointly Titled Bank Accounts?
A jointly titled bank account is a specific type of account that held by more than one person where there is a right of survivorship. There are no restrictions regarding who can be an owner, which can include spouses, friends and business partners, among others. Everyone named on the account has equal access to funds, regardless of who deposited the money.
Right of Survivorship
One distinct feature of a joint account that is the “right of survivorship, ” which is an option on all standard joint bank account forms. Joint bank accounts may not be right for everyone. The rules for how your money is handled in the event of death or divorce will vary depending on the type of joint account you open and your state’s laws.
If your joint bank account carries a right of survivorship, the account bypasses probate in the event of an owner’s death. Because probate can be a costly and time-consuming process, a joint account with a right of survivorship can help make sure funds are available to pay bills without delay after one party’s death.
If your account carries a right of survivorship and you die, your account will not be included in your estate and therefore will not honor any instructions in your will, if you have one. This could lead to an unintended consequence if you meant to leave your money to your heirs, and not your co-owner. Also, the account must be managed by all individuals on the account. That means that you will be liable for any overdrafts, judgments or liens whether you created those judgments or liens.
In conclusion, there are advantages and disadvantages to jointly titled bank accounts and you should consider those factors before opening an account.
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