The disposition of a bank account when a person dies depends on the legal title of the account. Joint bank account titles have their history in English common law and historically applied only to real estate, but the titling conventions now apply to any form of real or intangible property.
Tenancy in Common
Tenancy in common is property ownership by at least two parties. If a bank account title is as a tenancy in common account then the owners of the account do not have any survivorship rights to the bank account. This means that when one owner dies, the share of the bank account owned by the decedent passes to his heirs. The surviving owner has no rights to the deceased owner's share of the property.
Tenancy by the Entireties
Tenancy by the entireties is a form of joint asset ownership from old English common law available only to married couples. The husband and wife act jointly regarding bank account decisions, and tenancy by the entireties creates a form of creditor asset protection. Upon the death of one spouse, the property passes to the surviving spouse by operation of law.
Joint tenancy is the most common form of bank account ownership. Owners of joint tenant accounts have rights of survivorship, which means that when one account owner dies, all of the property in the bank account passes to the surviving owner by operation of law. Standard bank accounts with joint owners that do not specify a form of ownership are joint tenant accounts.
Ask for Advice
State law applies to banking and the rules vary by state and certain forms of ownership may not be available in every state. In addition, some financial institutions will only title joint owner accounts as joint tenancy. A local banker can advise on what forms of ownership are available at his institution. Ownership titles can affect estate planning decisions, which makes it a good idea to check with a licensed attorney that specialises in property ownership.