Selecting an Account at a Financial Institution – Cross Timbers Gazette | South Denton County | Mound of flowers


The type of account you choose can determine how property is transferred upon your death. One of the most common mistakes people make is selecting a multi-party account with right of survivorship when they really want a convenience account.

A common situation is for a parent to add an adult child to the bank account for the purpose of helping pay the bills. There is no intention to change the estate plan to exclude other children upon the death of the account holder, but that is exactly what is happening.

A multi-party account with right of survivorship transfers ownership of the account to the surviving parties upon the death of one of the parties. Thus, if only one child is added to the account, the others will not take care of the death.

An account payable on death transfers ownership to one or more named beneficiaries. No one else can transact on the account and the account does not go under will.

An account of convenience allows one or more signers of convenience to transact for a party, but allows the account to transmit the death by will or intestate.

Many times a parent will create an account with right of survivorship when they really want a convenience account.

Estate planning isn’t limited to wills, trusts and powers of attorney. A proper estate plan requires a review of multi-party accounts and beneficiary designations to ensure that the legal consequences are in line with the individual’s intention.

Obtain a copy of your account agreement from your financial institutions and discuss it with your estate planning lawyer, along with your other estate planning documents.

Robert is an elder, estate planning and estate lawyer at Hammerle Finley Law Firm.

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