If you have a bank account with one or more other people on the account, special rules and laws govern what happens in the event that one of the parties on the account dies. The issue with multi-party joint deposit accounts is that it must be determined if the funds in the account should go to the other account holders or if the account should be considered as part of the estate and be divided according to the will or state intestacy laws.
For example, a man had three children and a wife, and he had a deposit account with his youngest son’s name on it so that the son could pay for college expenses easily. If that man died would the son be entitled to the funds in the account even if the wife was the sole beneficiary named in the will? This is the type of problem that multi-party deposit accounts pose to the courts and estate planning attorneys.
Under the Multi-Party Joint Deposit Account Act, the law provides that generally the other account holders would still own the account after one account holder dies. Note that taxes may still be owed on the money in the account.
However, the Multi-Party Joint Deposit Account Act does carve out some exceptions to this general rule. These exceptions include:
- If the account was created for the only purpose of convenience to allow one account holder to write checks for another account holder, a court may find that the account belongs to the estate. The estate would have to prove through documents and testimony that the decedent intended for the account to become part of his estate and not remain with the other account holders.
- If the decedent was acting under undue influence in creating the account and naming joint owners, a court may determine that the account should be considered as part of the estate.
- Finally, a court could look at the facts and circumstances of the case and determine if the decedent meant to create “survivorship rights” (the right to inherit) by creating the joint deposit account. If there is no evidence of this intent, a court may determine that the account should be distributed along with the rest of the estate.
Call 732 238-8686 today for more information.
Each situation is different, especially in the context of estate planning as there are many options available to people planning how their property will be distributed upon death. Multi-party joint deposit accounts are useful in many circumstances but do create complications in the estate planning.
For a review of your case and to schedule an appointment call the skilled New Jersey Estate Planning lawyers at Bowne, Barry & Barry 732 238-8686.