A joint account is one with two owners, whether they are spouses, family members, friends or business partners. The nature of the account allows each party to deposit and withdraw money as they wish. This can continue after the death of one owner but the bank must be notified of the death. The process is straightforward and requires only a few details.
Right of Survivorship
Find out from your bank whether your joint account was opened with the right of survivorship. This means that when one of the account holders dies, the surviving party becomes the sole owner of the account. A WROS -- standing for "With Right of Survivorship" -- after the names of the account holders expressly implies this intention. If there is no right of survivorship, the surviving party does not acquire the account. It is subject to the directives in the decedent's will regarding the estate.
Notifying the Bank
Call, visit or write to your bank to notify them of the death. Provide the deceased's full legal name, Social Security number, account number and a certified copy of the death certificate. Ask for the mailing address of the department responsible for receiving this information if you plan to mail it in.
You may have to pay estate and inheritance taxes on the money as the new sole owner. If you are the decedent's spouse, you will pay tax on half of the money in the joint account. If not, you will pay tax on the full amount. Federal estate tax is required only when the decedent's estate is worth $5.43 million or more. As of 2015, the following states charge inheritance tax: Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Spouses are exempt from this tax, and some states either don't charge children of the deceased or allow them to pay a smaller rate.
As the sole owner of the joint account, which is not subject to probate, you can make changes to it as you wish. You may ask the bank to remove the decedent's name from the account so that only your name appears, leave it as is or close it. Your bank must have a copy of the death certificate to change the names on the account or close it. If there are uncertainties about the decedent's intentions and your right to the account, there might be some opposition from family members. In that case, their actions, such as an injunction, might stop you from using or making changes to the account.
- Nolo: What Happens to Bank Accounts at Your Death: Jointly-Owned Accounts
- Independent Bankers Association of Texas: Deposit Accounts, Death of an Accountholder: Without Right of Survivorship
- Bank of America: How to Notify Bank of America when a Customer Passes Away
- Nolo: Inheritance Tax
- Federal Deposit Insurance Commission. "Joint Accounts (12 C.F.R. § 330.9)." Accessed Feb. 14, 2020.
- Capital One. "Our First Bank Account." Accessed Feb. 14, 2020.
- Stokes Lawrence, P.S. "Joint Tenancy Bank Accounts as Part of Estate Planning." Accessed Feb. 14, 2020.
- Wells Fargo. "What to Do When a Loved One Passes Away." Accessed Feb. 14, 2020.
- Fidelity. "Investment Accounts: Transfer on Death." Accessed Feb. 14, 2020.
- TurboTax. "Death in the Family." Accessed Feb. 14, 2020.
- Internal Revenue Service (IRS). "Topic No. 403 Interest Received." Accessed Feb. 14, 2020.
- Fidelity. "Probate for Inheritances." Accessed Feb. 14, 2020.
- Internal Revenue Service (IRS). "Estate Tax." Accessed Feb. 14, 2020.
- TurboTax. "What Are Inheritance Taxes?" Accessed Feb. 14, 2020.
- Consumer Financial Protection Bureau (CFPB). "Can I Be Responsible to Pay Off the Debts of My Deceased Spouse?" Accessed Feb. 14, 2020.
Tina Amo has been writing business-related content since 2006. Her articles appear on various well-known websites. Amo holds a Bachelor of Science in business administration with a concentration in information systems.