I’ve been meeting with clients after the death of a family member for more than 35 years. There is one question that always comes up but for which the client never has an answer is “Is the account a joint tenant with rights of survivorship account (JTWROS), payable on death (POD) account or a convenience account?”
Ownership on death passes by will or inheritance (if there is no will) is some cases, but not all. The terms of an account control passage of ownership on death and control over the terms of the will or laws of inheritance.
- A joint tenants with right of survivorship account will pass to the other account holders on the death of one of the account holders and not under the will.
- A payable on death account is payable to the payable on death beneficiary and under the will.
- A convenience account passes nothing to the convenience signer and the account passes under the will or by inheritance if there is no will.
Many people set up a joint tenant with right of survivorship account when what they really want is a convenience account. For example if one of the adult children is being added to Mom’s account in order to help her pay her bills, a convenience account will allow that to be done and will not alter the provisions of the will. On the other hand a joint tenant with right of survivorship account will pass ownership of the account to that adult child on Mom’s death regardless of the provisions of the will, with the result that the other children will not receive their share of those accounts.
Proper estate planning considers not just wills and trusts, but every means by which ownership passes on death. To be sure that Mom’s wishes are truly being followed we need to look at the will of course, but also all beneficiary designations, and account registrations.
There is no substitute for the advice of an experienced estate planning lawyer to make sure that your estate plan will truly carry out your wishes.