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LSDefine
Simple English definitions for legal terms
Multiple Party Account
Read a random definition: United States Reports
A quick definition of Multiple Party Account:
A multiple party account is a type of bank account that is owned by more than one person. It's like sharing a piggy bank with your friends or family. When one person passes away, the money in the account automatically goes to the other owner(s) without needing a will.
A more thorough explanation:
A multiple party account is a type of account that is held in a financial institution, such as a bank or brokerage firm, and is registered in the names of more than one person. This type of account is also known as a joint account.
Multiple party accounts are often used as a way to transfer assets to a beneficiary without the need for a will. When one of the account holders passes away, the remaining account holder(s) automatically inherit the assets in the account.
- A married couple opens a joint bank account to pay for household expenses.
- Two business partners open a joint brokerage account to invest in stocks and bonds.
- A parent and child open a joint savings account to save for the child's college education.
These examples illustrate how multiple party accounts can be used for different purposes, such as managing finances, investing, and saving for the future. They also show how the assets in the account are automatically transferred to the surviving account holder(s) when one of the account holders passes away.