Will a Joint Account Pass to the Surviving Owner Outside of Probate?
The way multiple party account pass after the death of a joint account holder is determined by statute.
Multiple party accounts that are held with rights of surivivorship pass to the surviving without the need for probate; however, simply checking a box indicating “Right of Survivorship” may not be sufficient to create that relationship, according to a recent case.
To create a right of survivorship to a joint account, there must be 1) a written agreement, 2) signed by the decedent, 3) which specifies that his interest “survives” to the other party.
In Hare v. Longstreet, LD Hare opened a checking account. A couple of years later, he added Sherry Longstreet to the account, and then about 15 years later, he added his son, Larry W. Hare, to the account.
The signature card contained the words “Multiple-Party Account With Rights of Survivorship” along with a box beside it. The box was checked both LD Hare and Larry W. Hare initialed beside it. All three account holders signed the card.
The Appellate Court decided that no right of survivorship was created. Why?
The Court reasoned that a right of survivorship was not created because the signature card did not include language substantially similar to language required by the Texas Estates Code.
Section 113.151(b) of the Estates Code requires that language substantially similar to the following be included to create a right of survivorship: “On the death of one party to a joint account, all sums in the account the date of the death vest in and belong to the surviving party as his or her separate property and estate.”
The Estates Code also provides that a survivorship agreement may not be inferred from the mere fact that the account is a joint account or that the account is designated as JT TEN, Joint Tenancy, or joint, or with other similar language.
Accordingly, simply checking a box next to the words “Multiple-Party Account With Rights of Survivorship” was not sufficient to create survivorship rights. It is therefore important to double check all your joint accounts to confirm that the appropriate language is included if you want the account to pass to the survivor.