Are Joint Bank Accounts Frozen When Someone Dies?
Learn whether joint bank accounts are frozen upon death. Discover how account structure dictates access and necessary steps for surviving account holders.
Joint bank accounts are a common financial tool, but their status upon the death of one account holder can be a source of confusion. Many individuals wonder if these accounts become inaccessible or “frozen” during such a sensitive time. A joint bank account generally involves two or more individuals sharing ownership, with each having the right to deposit, withdraw, and manage the funds. The specific legal structure of the account determines what happens to the funds when one owner passes away. This article clarifies the typical outcomes for joint bank accounts after the death of an owner, focusing on how different account structures influence accessibility.
General Treatment of Joint Bank Accounts Upon Death
Most joint bank accounts are established with a feature known as “Joint Tenancy with Right of Survivorship” (JTWROS). This designation means that upon the death of one account holder, ownership of the funds automatically transfers to the surviving account holder(s). The right of survivorship ensures a seamless transition of ownership.
Due to this automatic transfer, JTWROS accounts typically bypass the probate process, which is the legal procedure for validating a will and distributing a deceased person’s assets. This characteristic is a primary reason why these accounts are generally not frozen when one owner dies. The surviving owner maintains full control and access to the funds without interruption.
The immediate transfer of ownership means the surviving individual can continue to use the account to manage financial obligations. Banks will usually require a certified copy of the death certificate to update their records and remove the deceased person’s name. This process confirms the death and formalizes the surviving owner’s sole control.
Impact of Account Structure on Accessibility
While JTWROS accounts typically offer uninterrupted access, other joint account structures and beneficiary designations behave differently, influencing whether an account is frozen or accessible. The specific legal setup of an account determines its fate upon an owner’s death.
Tenancy in Common (TIC) Accounts
Unlike JTWROS accounts, Tenancy in Common (TIC) accounts do not include a right of survivorship. In this arrangement, each account holder owns a distinct share of the account’s funds. When one owner dies, their share does not automatically transfer to the surviving co-owner(s). Instead, the deceased owner’s portion becomes part of their estate.
This means the deceased’s share may be subject to probate, which can lead to restricted access until the estate is settled. Distribution of the deceased’s share will follow the instructions in their will or, if no will exists, state inheritance laws. The surviving co-owner may need to wait for legal authorization from a probate court to access the deceased’s share.
Payable on Death (POD) or Transfer on Death (TOD) Accounts
Payable on Death (POD) and Transfer on Death (TOD) accounts are not traditional joint accounts but are valuable tools for passing assets outside of probate. These accounts allow the owner to designate a beneficiary who will receive the funds directly upon the owner’s death. POD designations are typically used for bank accounts, while TOD designations are common for brokerage accounts.
The key feature of POD/TOD accounts is that the named beneficiary has no access to the funds while the owner is alive. Upon the owner’s death, the assets transfer directly to the named beneficiary without going through probate, thereby avoiding potential freezing. To claim the funds, the beneficiary generally needs to provide a certified copy of the death certificate and proof of their identity to the financial institution.
Actions for the Surviving Account Holder
Upon the death of a joint account holder, the surviving individual must notify the bank. This notification typically requires providing a certified copy of the death certificate. It is advisable to obtain multiple certified copies of the death certificate, as various institutions may require them.
For accounts held as Joint Tenancy with Right of Survivorship, the surviving owner will need to present the death certificate to the bank. The bank will then update the account title to reflect the surviving individual as the sole owner. This process typically ensures continued, uninterrupted access to the funds.
If the account is a Payable on Death (POD) or Transfer on Death (TOD) account, the named beneficiary should contact the financial institution. They will generally need to provide a certified death certificate and valid identification to claim the funds. The bank will then typically establish a new account in the beneficiary’s name and transfer the assets.
For Tenancy in Common (TIC) accounts, the situation is more complex as the deceased’s share may enter probate. The surviving co-owner should still notify the bank and inquire about the specific documentation required. This may include legal documents from a probate court, which grant authority to manage the deceased’s estate’s assets. The bank may also require the surviving owner’s identification and the account number.