Legal Definitions - joint-and-survivorship account

A joint-and-survivorship account is a type of financial account, such as a bank account, savings account, or investment account, that is owned by two or more individuals. The defining characteristic of this account is the "right of survivorship." This means that if one of the account holders passes away, their ownership interest in the account automatically transfers to the surviving account holder(s) by operation of law. This transfer happens without the need for a will or the often lengthy and complex probate process, ensuring that the funds or assets in the account are immediately accessible to the survivors.

Here are some examples illustrating how a joint-and-survivorship account works:

• Married Couple's Household Account:Example: David and Lisa, a married couple, open a joint checking account to manage their everyday household expenses, pay bills, and receive their salaries. They set up this account with rights of survivorship. How it illustrates the term: If David were to pass away, Lisa would automatically become the sole owner of all funds in the checking account. She would not need to present David's will or wait for a court to approve the transfer of funds; she would retain immediate and full access to the account to continue managing their finances without interruption.

• Parent and Adult Child for Estate Planning:Example: Eleanor, an elderly woman, adds her adult daughter, Maria, to her primary savings account as a joint-and-survivorship owner. Eleanor's intention is to ensure that Maria has immediate access to funds to cover funeral expenses and other urgent costs should Eleanor pass away, without having to wait for the probate process. How it illustrates the term: Upon Eleanor's death, Maria automatically inherits the entire balance of the savings account. This arrangement allows Maria to access the funds promptly to manage final arrangements and other immediate needs, bypassing the legal complexities and delays typically associated with settling an estate.

• Siblings Managing Shared Property:Example: Brothers Mark and Steven jointly own a vacation cabin. They open a joint-and-survivorship investment account specifically to save for major repairs, property taxes, and insurance for the cabin. How it illustrates the term: If Steven were to die unexpectedly, Mark would automatically become the sole owner of all the funds in this investment account. This ensures that the money set aside for the cabin's upkeep remains accessible to Mark, allowing him to continue managing the property's expenses without interruption or needing to involve Steven's estate in accessing those specific funds.