Joint Bank Accounts — Who Owns What?

One aspect of estate planning that many people do not consider is the type of bank account they open, who has access to those funds and in what capacity. When more than one party is listed as an owner or user of the account, that account is called a multiple-party account. There are four commonly used multiple party accounts: 1) joint account, 2) agency/convenience, 3) payable on death, and 4) trust.


The joint account is payable on request to one of the parties whose name is on the account. Typically, as long as all parties to the account are living, each party owns the funds that party contributed, minus that party’s withdrawals. The existence of funds in a joint account does not operate to transfer ownership of the funds to the other parties. If a party withdraws more than that party deposits, the amount is not a gift unless the other parties who deposited money intended to make a gift of the amount the party withdraws in excess of the deposits.


Texas law does not have a presumption that owners of a joint account intend to make a gift of the funds in the account to the other parties. Even though an account may be joint, when a party dies, that party’s deposits pass by will or intestacy, along with the rest of the probate estate, and not to the other survivors. However, if the account expressly specifies in a writing signed by the deceased party that the account proceeds shall pass to the surviving parties to the account, it will pass to the survivors.


Many of our clients believe that, because their names are on the account, they are a joint owner of all of the funds in the account, and that if another party were to pass away, that the survivor would own all of the funds. As we described above, that is not always the case.