» Titling Accounts Unmarried

The term "survivorship account" generally refers to an account or other asset that has "rights of survivorship." Under Texas law, when an account or other asset is registered as "joint tenants with right of survivorship" or gives other effective indications of a survivorship right, your Will does not control passage of the property. Rather, upon your death, the account or property passes by "right of survivorship" to the persons named in the survivorship provision, not the persons named in your Will.

These rights typically apply to: (i) bank accounts, brokerage accounts, stock certificates, or other accounts that are registered in two or more joint names as "joint tenants with right of survivorship"; and (ii) all federal savings bonds held in two or more joint names. Survivorship issues also apply to: (a) accounts registered in your name as "trustee" for one or more named individuals; and (b) accounts marked "pay on death" ("POD") or "transfer on death" ("TOD") to another party. In Texas, it is uncommon for survivorship rights to apply to real estate.

Some accounts that are registered in two or more names are not survivorship accounts. They are "co-tenant" or "convenience" accounts. They do not have a survivorship feature, so they do not become the property of the survivor. Instead, when one owner dies, his or her interest in the account passes under his or her Will. Since the account holder's Will controls his or her non-survivorship joint accounts, these accounts avoid the problems of survivorship accounts. In fact, many people add one or more family members as signers on accounts so that the accounts can be accessed in the event of the owner's disability. These accounts, if properly styled as convenience accounts, do not give rise to the problems associated with survivorship accounts.

Many times bank or brokerage statements will indicate survivorship language on their account statements. They often list two names, followed by the designation "JTWROS," "Jt. w/ Surv.," "Jt. Ten." or with some other indication of survivorship. However, not all survivorship accounts are so clearly labeled. More importantly, survivorship is governed by the account agreement or signature cards that were signed when the account was opened (or when someone’s name was added to the account), not the description of the account on the statement. The only way to be sure a joint account is not a survivorship account is to obtain and review a copy of the account agreement or signature card.

Savings and loan institutions, banks, and brokerage companies furnish these "right-of- survivorship" accounts thinking that they are convenient for their clients. Survivorship accounts provide a simple way for people to provide access to their accounts upon the depositor’s death. Unfortunately, many people establish these accounts without realizing the impact they have on an individual's estate planning matters.

Some people fear that upon their death, their financial assets will be "frozen," and therefore unavailable to family members. This is not the case in Texas. Banks are authorized to continue to honor checks drawn on, and withdrawals made from, accounts by any signer on the account, even if the other account holder is deceased. Therefore, it is not necessary to use a survivorship feature on an account to maintain access to the account after death. Convenience or co-tenant accounts accomplish the same result without interfering with your estate plan.

For people of modest means who either have no Will or else have a Will that contains no estate tax or trust planning, survivorship accounts are often fine. In addition, many people have household checking accounts or other accounts that are intended to pass outright to the surviving account holder, and persons who want to make a specific cash gift may put the cash, etc. in a POD or other survivorship account. So long as the dollar amounts are relatively small, survivorship provisions in these situations generally do not cause a problem; however, the account holder must understand that the account will pass outright to the person(s) named in the survivorship provision (if he or she survives), not the person(s) named in the account holder's Will (including the Executor, who may need the funds to pay estate debts). In most other cases, survivorship accounts should be avoided.

You should make certain that none of your accounts or other assets are registered in the form of "joint tenants with right of survivorship," "JTWROS," "POD," "TOD" or as "Trustee" for another individual. Instead, your accounts should simply be registered as "Tenants in Common" or as "Joint Tenants Without Right of Survivorship," or in your individual name without any indication of a survivorship right. If you want another person to help you with your account, that person can be added to your account as a "co-signer" and the account can be labeled a "convenience account" (but it should not have a survivorship feature).