Do Joint Bank Accounts Go Through Probate?

by | Jan 20, 2023 | Blog, Estate Planning, Probate, Probate And Estate Administration |

Much confusion exists surrounding estate planning, and all kinds of unique circumstances can come up. For example, many married couples or domestic partners share a joint bank account. This is also common in business arrangements. What happens when a co-owner of the account dies? Do joint bank accounts go through probate in California? Estate Planning Attorney Alice A. Salvo addresses this very relevant question.

Why Have a Joint Bank Account?

A joint bank account is simply an account with more than a single owner. Joint bank accounts function exactly like a single owner account, except that more than one person own the account and enjoy access to its funds and information. Married couples and domestic partnerships often choose to use a joint or shared bank account to keep better track of their money.

Joint accounts allow either party to invest and spend, and share the responsibility for managing the assets. They are helpful for common expenses like:

  • Mortgages
  • Car payments
  • Groceries
  • Utilities
  • Vacation spending
  • Savings
  • Insurance payments

Pooling money from both partners makes it easy to share the load for saving, household expenses and planning a budget. Account activity is visible to both account owners, so there is built-in accountability. Any splurging or surprise purchases are known to the other account owner.

Depending on your bank, a joint account can come with some additional benefits not available to individual account owners. Combining your money into a single account can make it easier to meet any account minimums or balance requirements. You may also enjoy better interest rates, lower or waived account maintenance fees and other rewards.

Joint Bank Accounts and CA Probate

Probate is the process of settling a deceased person’s estate. In California, probate hearings are handled through the Probate Department of the Superior Court in the county where your loved one lived at the time of his or her death. The court will either recognize and authorize the executor listed in the decedent’s will, or if there is no will, appoint an administrator to settle the decedent’s estate. Whether or not a joint bank account must be included in probate depends on the particular state’s laws and the account agreement. These can differ between various banks.

Most bank account agreements include what is known as a “right of survivorship.” This means that in the event of your joint bank account co-owner’s death, all the funds in the account pass directly to you as the co-owner, and now solitary owner. The surviving account owner can continue enjoying access to the funds and using them as he or she sees fit. There are no interruptions in service and the account is not subject to probate.

For example, if you and your spouse own a bank account with the right of survivorship privilege in the contract, and your spouse dies, you as the surviving co-owner automatically become the account’s solitary owner and own all rights and privileges to the account.

Without this right of survivorship, the share of the bank account belonging to your deceased co-owner is distributed through his or her estate and would be subject to probate.

Different regulations may apply to business accounts, depending on the type of account and the bank’s policies. In some cases, the assets in a joint business account do not solely belong to the account holders, but are shared or owned by the business itself. In these cases, the decedent’s portion of the assets would be distributed to any named beneficiaries and the remainder would be divided between the other account owners or remain the property of the business.

Seasoned CA Estate Planning to Avoid Probate

California Estate Planning Attorney Alice A. Salvo has the knowledge and experience to provide seasoned advice and guidance when you need help crafting a secure and effective estate plan. She can explain how bank accounts and other assets can be protected from probate costs and hassles to preserve your assets and save your loved ones time and money.

Call our Woodland Hills, CA office at 818-676-9572 or complete the contact form to request a confidential consultation with Attorney Alice A. Salvo and get the help you need to secure your future for those you love.

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