Rights of Joint Account Holders

Part of our Arizona Probate and Estate Litigation practice.

In Arizona, a joint bank account passes to the surviving account holder when one holder dies, regardless of what the will says, unless the account agreement states there is no right of survivorship (A.R.S. § 14-6212). While both holders are alive, each owns the account in proportion to what they contributed (A.R.S. § 14-6211). Disputes arise when a joint holder was added for convenience rather than as a gift, when a caregiver or family member drained the account, or when the decedent lacked capacity or was unduly influenced when the account was set up.

Rights of Joint Bank-Account Holders in Arizona Probate

When someone dies in Arizona, one of the first steps is to determine who gets what property.  To do that, it is important to categorize each asset based on its titling and whether any beneficiary is listed on the title of the property itself.

Titling is the record owner of the particular account, home, parcel of  real estate or other property.

Assets that have titles in Arizona can be classified according to the titling that was effective at the person’s death as follows:

• Trust Assets: Assets titled in the name of a trustee of a trust.  Those assets pass to the beneficiaries per the terms of the trust.
• Non-Probate Transfers: Property that has a joint owner with right of survivorship or a beneficiary designation, such as a beneficiary deed to real property.  These accounts and other property pass according to the deed or designation.  Joint accounts, discussed below, fall into this category.  There are various other rules for other types of non-probate transfers.
• Estate or Probate Assets: Assets owned by the Decedent or person who died, not titled in a trust, without leaving any beneficiary designation and without any joint titling.  Estate property is often governed by the person’s will.  If not, anything that is not otherwise designated would pass according to Arizona’s intestacy laws.

Navigating the complexities of estate administration can be a daunting task, especially when it involves understanding the rights and responsibilities associated with joint bank accounts and other non-probate transfers.

In Arizona, the laws governing joint accounts come with their own set of rules and implications, which can impact the distribution of assets. Whether you’re considering adding a family member to your account or you’re an heir concerned about how joint accounts are handled after a loved one’s passing, understanding Arizona’s specific laws is crucial.

In this article, we’ll delve into the legal intricacies of joint accounts in Arizona. We aim to clarify common misconceptions and provide you with the knowledge you need to make informed decisions. Read on to equip yourself with essential information and, as always, feel free to reach out to us for personalized advice tailored to your unique situation.

Joint Accounts in Arizona

Arizona’s rule is simple.  When there are two or more people listed as signers or owners on a bank account, everyone on the account has survivorship rights unless the account says otherwise.  See A.R.S. §§ 14-6212(A), (C).

When property is owned under a right of survivorship, the surviving owner automatically receives the dying owner’s share of the property.  To avoid this automatic or default rule, the account must specify that it is not with right of survivorship if there is more than one owner/signer on the account.

Real Life Case Example

For example, in In re Elizabeth J. Scozzari Trust, Gerald Scozzari was sued by his siblings to return money he received from a joint bank account with his mother and to remove him as trustee.  The trial court ordered Gerald’s removal as trustee and ordered him to return the money. However, the appellate court reversed.  The appellate court reinstated Gerald as trustee and held Gerald was entitled to the money from the joint account.

Elizabeth Scozzari executed a will in 1988.  The will referenced a trust naming her son, Gerald, as trustee.  Elizabeth intended that all of her children share equally in her estate.  Thirteen years later, in May 2001, Elizabeth opened a new checking account and added Gerald on the account shortly after.  That account was linked to Elizabeth’s savings account at the same bank.

Elizabeth died in 2005.  At that time, there was about $75,000 in those accounts. Elizabeth contributed all of the $75,000, but the account did not say if there was a right of survivorship.

Three years later, in July 2008, Gerald’s siblings petitioned for an accounting and removal of Gerald as trustee.  As part of the accounting, Gerald claimed that the money in the joint accounts belonged to him.  However, Gerald’s siblings claimed the money belonged to the estate.

The court agreed with Gerald:  Both Gerald and Elizabeth’s names were on the checks, and Gerald was listed as a recipient on the bank statements.  The bank documents listed Gerald as a co-applicant, and there was no evidence Elizabeth signed anything to overcome the default rule that the accounts were with survivorship rights.

Since survivorship rights are automatic under Arizona law, unless the account specifically states otherwise, the court held that Gerald was automatically entitled to the balance of the funds remaining in the joint accounts at the time  Elizabeth died.  See In re Elizabeth J. Scozzari Trust, 2011 WL 4415843, (Ct. App., 2011)(unreported).

Lessons Learned

The moral of the story is simple.  Ensure you know what it means to add someone on your bank or other financial account in Arizona.  If the account does not specify otherwise, on the death of a party to the account, the surviving owner(s) is generally entitled to all of the funds. As you can see from the Scozzari case, this rule overrides the person’s last will and testament or trust.

So, if you want an account to be part of your estate and you have a joint signer on the account, make sure you reject the survivorship default rule when you open the account or add a signer.

Want to learn more?  Watch our video about Potential Perils of Non-Probate Transfers.

Rights While More than One Account Holder is Still Living

While the owners to a joint account are living, each is entitled to the share of the money they contributed to the account.  Married couples are presumed to make equal contributions to bank accounts, in the absence of proof otherwise.  A.R.S. § 14-6211.

Related Pages

• Arizona Probate and Estate Litigation
• Disputes and Litigation Over Non-Probate Assets in Arizona
• Financial Exploitation of Vulnerable Adults
• Arizona Intestate Inheritance Law
• Community vs. Separate Property
• Undue Influence

Facing a Joint Account Dispute?

Understanding Arizona’s laws on joint accounts is crucial, especially when disputes arise over asset distribution after a loved one’s passing. These laws can have significant implications, sometimes even overriding wills and trusts.

If you’re entangled in a joint account or other estate or trust dispute in Arizona, don’t navigate these complex waters alone. Contact Berk Law Group today for a focused consultation.

Frequently Asked Questions About Joint Accounts in Arizona

What is a joint account?

A bank or investment account titled in the names of two or more people, each of whom can withdraw funds. Arizona treats most such accounts as joint accounts with right of survivorship unless the account documents say otherwise.

How does Arizona law treat joint accounts when one holder dies?

Under A.R.S. § 14-6212, the funds belong to the surviving holder or holders. The account does not pass through probate and is not controlled by the will.

Can a will override a joint account’s survivorship rights?

No. A will controls only probate assets. To change who receives a joint account, the account itself must be retitled or the survivorship designation changed with the bank during the owner’s life.

Who owns the money in a joint account while both holders are alive?

Each holder owns the account in proportion to their net contributions, unless there is clear and convincing evidence of a different intent (A.R.S. § 14-6211). A holder who withdraws more than their share can be liable to the other holder or, after death, to the estate.

What if a parent added a child to an account only for convenience?

The child may still take the account by survivorship unless the estate can prove the parent did not intend a gift, that the child was added through undue influence, or that the parent lacked capacity. These cases turn on the account paperwork, the bank’s records, and evidence of the parent’s intent.

Can a joint account holder be liable for financial exploitation?

Yes. If the decedent was a vulnerable adult and the joint holder used the funds for their own benefit, the estate may bring a claim under A.R.S. § 46-456 for the funds and attorneys’ fees, plus potential double damages and other remedies.

Does a joint bank account go through probate in Arizona?

No. A joint account with right of survivorship passes to the surviving holder outside probate and is not part of the probate estate, although it can be reached in limited situations to pay the decedent’s debts if the probate estate is insufficient.

How do I know if my joint account has right of survivorship?

Check the account agreement or signature card. In Arizona the default is survivorship, so unless the bank’s documents say the account is held without right of survivorship, or as a convenience account, the survivor takes the funds.

Can right of survivorship on a bank account be challenged?

Yes. The survivor’s claim can be challenged by showing the decedent lacked capacity when the account was set up or the joint holder was added, that the joint holder used undue influence or fraud, that the account was intended only for convenience and not as a gift, or that the joint holder exploited a vulnerable adult. These claims are brought in the probate court or a civil action.

Is adding someone to my bank account in case of death a good idea?

Often not. Adding a child or helper as a joint owner gives that person full access now, exposes the funds to their creditors, and passes the whole account to them at death regardless of your will, which frequently leads to disputes among heirs. A payable-on-death designation, a power of attorney, or a trust usually accomplishes the goal with less risk.

Glossary

Joint Account: A financial account owned by two or more individuals, each with equal access to the account’s funds.

Survivorship Rights: The legal principle where the surviving account holder(s) automatically inherit the deceased account holder’s share of a joint account.

Non-Probate Transfers: Assets that pass directly to a beneficiary without going through probate, such as trust assets, joint accounts with survivorship rights, joint tenancy deeds and beneficiary deeds.

Estate Assets: Assets that are part of the deceased person’s estate and are subject to probate.

Probate: The legal process of administering a deceased person’s estate, including distributing assets and settling debts.

Intestacy Laws: Laws that govern the distribution of estate/probate assets when a person dies without a valid will.

Trust Assets: Assets that are held in a trust and pass to beneficiaries according to the terms of the trust.

Beneficiary Designation: A legal document specifying who will receive an asset upon the owner’s death.