Can you still withdraw money from a joint account if one person dies?

Navigating finances after a loved one’s death can be complex, particularly with joint bank accounts. The ability to withdraw money from such accounts after an owner passes away depends on the account type. Different structures dictate how assets are handled upon an owner’s death, making these distinctions important for surviving account holders and estate planning.

Types of Joint Accounts and Survivorship

Joint bank accounts involve two or more individuals sharing ownership and access to funds. The concept of “right of survivorship” is a key element, meaning the deceased owner’s share automatically transfers to the surviving owner(s) without needing to go through probate.

One common type is Joint Tenancy with Right of Survivorship (JTWROS). In this setup, all owners have equal rights and ownership of the account’s assets. When one joint owner dies, the surviving owner or owners automatically assume full ownership of the account. This direct transfer bypasses the probate process, allowing the surviving owner continued and immediate access to the funds.

Conversely, a Tenancy in Common (TIC) account does not include the right of survivorship. In a TIC arrangement, each owner holds a distinct, undivided interest in the account. When one owner dies, their share does not automatically transfer to the surviving co-owner but instead becomes part of their estate, subject to their will or state inheritance laws. This means the deceased’s portion typically goes through probate before being distributed to their designated heirs.

Another form of joint ownership, specifically for married couples, is Tenancy by the Entirety. This is similar to JTWROS in that it includes the right of survivorship, meaning the surviving spouse automatically inherits the entire account. Many states presume that joint bank accounts held by married couples are Tenancy by the Entirety, absent a different written designation. This form of ownership often provides additional protections against creditors of only one spouse.

Accessing Funds After an Account Holder’s Death

The process of accessing funds from a joint account after an owner’s death varies significantly based on whether the account includes a right of survivorship. For accounts structured with survivorship rights, such as Joint Tenancy with Right of Survivorship (JTWROS) or Tenancy by the Entirety, the surviving owner generally maintains full access to the funds. This is because ownership automatically transfers to them outside of the probate process.

Financial institutions typically require the surviving account holder to present a certified copy of the deceased’s death certificate to update account ownership. They may also request identification from the surviving owner. Banks might place a temporary hold on the account to verify the death certificate and process the change, but this usually does not prevent eventual access. Contacting the financial institution promptly is advisable to understand their specific requirements.

In contrast, if a joint account is held as Tenancy in Common, the deceased owner’s share is typically frozen. The surviving owner cannot access this portion of the funds until a legal representative, such as an executor or administrator, is appointed through the probate process. This appointment requires a court order, which grants the legal authority to manage the deceased’s assets. The duration of this process can vary, potentially taking several weeks or months, depending on the estate’s complexity and court schedules.

Tax and Reporting Implications

While a joint account with survivorship rights allows for a smooth transfer of funds, it does not necessarily exempt the account from tax considerations. The deceased’s portion of a joint account, even one with survivorship rights, may be included in their taxable estate for federal estate tax purposes. The federal estate tax applies only to estates exceeding a certain threshold, which for 2025 is $13.99 million per individual, or $27.98 million for married couples. Amounts above this threshold are subject to a tax rate that can reach 40%. Some states also impose their own estate or inheritance taxes, which can apply regardless of the federal threshold.

Any interest or dividends earned on the joint account after the date of death are generally considered income to the surviving owner for income tax purposes. Income earned before the date of death would typically be reported on the deceased’s final income tax return. The financial institution may report interest earned, and the surviving owner is responsible for reporting and paying taxes on their share of the income.

Financial institutions have reporting obligations to the Internal Revenue Service (IRS) when an account holder dies. They may report the value of joint accounts, especially those that include survivorship rights, to the IRS. This reporting helps the IRS track assets that might be subject to estate taxes. Consulting with a tax professional or an estate attorney is often recommended to understand the specific tax implications for a particular situation and to ensure compliance with all applicable federal and state tax laws.