What Happens to Bank and Brokerage Accounts After Death?

The first step is to determine what type of account you have.  You can determine what type of account you have by contacting your bank or reviewing your signature card.  Each bank will have specific terms associated with each account type.  There are some industry standards but you should contact each financial institution to determine the terms of the accounts you own.

Single Party Account

If you have a single party account which means only one person is named on the account, then you have two possible outcomes.  First, if the account has a pay on death beneficiary then it will go to that person.  The bank will transfer the funds in the account to that beneficiary upon proof of death.  Second, if the account has no pay on death beneficiary then it will pass according to the will or if no will exists to the owner’s heirs.

Multi-party Account

If you have a multi-party account which means two or more people are named on the account, there a several outcomes.  First, any person named on the account can withdraw all funds in the account.  However, each person only owns an amount equal to their contribution.  Second you need to determine if it was an account with survivorship rights.  If there are survivorship rights then the surviving people named on the account own all the funds in the account.  If there are not survivorship rights, then the money in the account owned by the person who has died passes according to the will or if no will exists to the owner’s heirs

Convenience Account

Convenience accounts have two or more names on the account.  On person is the depositor and the second is the co-signer.  The co-signer has authority to write checks for the benefit of the depositor only.  When the depositor dies the money does not go to the co-signer but passes according to the will or if there is no will it the depositor’s heirs.

Brokerage Accounts

They pass in a manner similar to the bank accounts described above.  The terms of the contract you signed when you opened the accounts will prevail.  In many cases these contracts are not controlled by the laws of the state where the account owner lives.  For this reason it is important to discuss your account selections with your attorney to ensure your selections conform to your desired estate distribution plan.

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Law Offices of Debbie J. Cunningham

Debbie Cunningham is an Irving attorney providing affordable estate planning to the Dallas/ Fort-Worth areas. She understands the steps you should take to protect yourself and your loved ones. Debbie is family-focused and wants to ensure her clients are fully informed on the options that are available for their families. Debbie’s own blended family has given her valuable insights into the complexities of family dynamics.

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