We often get asked about joint bank accounts, and how an account owner’s death impacts the ownership of said account. There is a lot of misinformation surrounding what the right of survivorship designation can and cannot accomplish. In the January 2019 Texas Bar Journal, Gerry Beyer highlighted Hare v. Longstreet in order to bring clarity to the relationship between bank accounts and rights of survivorship. Mr. Beyer stated, “most people would assume when opening a joint bank account that checking a box next to a phrase that said “with right of survivorship” and then initialing beside it would be sufficient to create survivorship rights. However, the Texas Court of Appeals in Hare v. Longstreet held otherwise. The court explained that the signature card lacked language substantially similar to the language required by Texas Estates Code §113.151 (b) (“On the death of one party to a joint account, all sums in the account the date of the death vest in and belong to the surviving party as his or her separate property and estate.”) Merely stating that the account has the right of survivorship is insufficient to make it so.”
This case is a perfect example of a person’s intent being determined in a courtroom after that person has passed away! There is no way to know the decedent’s true last wishes regarding the joint bank account because he or she has passed away. When there is a question regarding the correct beneficiary for an asset after an owner’s death, financial institutions almost always default to holding the funds and letting the court make the final decision. We advise our clients to obtain a very clear understanding of each beneficiary form they attach to their accounts and assets. Each entity and financial institution can vary in their policies and procedures. A comprehensive estate plan is the most effective way to make sure your assets transfer to the appropriate person or entity upon your death.
At Crain & Wooley, we work in partnerships with you to make sure your desires are clear and easy to follow for all who come after you. Do you have questions about rights of survivorship or other beneficiary designations? Email us your questions.