Do Joint Accounts Have to Go Through Probate?

Jointly owned accounts with “right of survivorship” will pass to the surviving co-owner.

However, if the joint tenancy is owned by tenants in common, then each owner’s interest will be distributed in accordance with the owner’s estate plan, provided there is one.

For example, if one of two business partners passes away, the deceased co-owner’s share flows to her beneficiaries, not her surviving partner.

If you own an account jointly with right of survivorship with your spouse, and then you pass away, your spouse as the surviving co-owner would then automatically become the account’s sole owner.

In general, probate can be avoided by establishing:

• A joint bank account with right of survivorship;
• Payable on death (POD) accounts; or
• Transfer on death (TOD) accounts, which apply to securities such as stocks or bonds.

Under a POD arrangement, upon your death, your assets will automatically transfer to your named joint owner or selected beneficiaries – and they are not obligated to share the assets with any other beneficiaries named in your Will or trust. 

Beware, this could mean that one person may receive a greater share of your estate than you had intended.

Therefore, such forms of ownership are usually not recommended solely for estate planning purposes.  However, in certain situations, they may make more sense, such as when an individual has just one beneficiary.

As for assets with joint tenancy with right of survivorship, when one of two joint tenants dies, the property then passes automatically to the surviving tenant under right of survivorship as well, and probate would not be required.

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