What You May Not Know About Your Joint Bank Account – Hughes Law

You may already know that a joint bank account is an account that two or more people share. This creates ease for each party to deposit and withdraw funds within one account. Many times, joint bank accounts are opened by close relatives, married couples or business partners. But how much do you really know about your joint bank account?

Joint bank accounts opened in the state of Ohio have a feature called “survivorship.” This simply means that after a death of one of the account owners, the ownership of the account passes to the rest of the owners.

So what does each person in the joint account own?

Ohio law states during the lifetime of the owners of a joint account, the account belongs to all of them. Each own a share of the account according to their individual contributions. By this law, Jane Doe owns her $5,000 contribution, while John Doe owns his own $6,000 contribution.

The rule holds until there is a death of one of the owners of the account. In 1994, the Supreme Court of Ohio ruled how the owners open a joint bank account usually concludes the ownership after a death. In our example, if John passes away, Jane will automatically receive ownership Does’ joint account as the surviving owner.

But this isn’t always the case. An Ohio court could rule the money should not be distributed evenly to the surviving owners if there is evidence that the deceased did not freely intend to establish the joint account due to fraud, duress, undue influence or lack of mental capacity.

What potential problems arise in a joint bank account?

The 1994 Court decision also makes it necessary for those considering opening a joint bank account to be knowledgeable about the legal side of things. Joint accounts are prone to a myriad of issues depending on the facts of the individual or family. They should be handled carefully, as many people have abused them.

It is generally not wise to name a child, neighbor, caregiver, boyfriend or girlfriend the joint owner of an account. One example of this is opening a joint account for an eldest child to better pay his or her parents’ bills, but leaving the child with sole ownership of the account after the parents are deceased. Probate can be avoided on accounts without naming a non-spouse a joint owner.

If you have questions about the legal indications of opening a joint bank account, Hughes Law can help. A joint bank account may not be the best option for your situation. We can also advise on power of attorney, trusts, wills and other estate planning tools.