Many banks automatically assign co-owners a right of survivorship, while others never do that unless specifically asked. If your wife has a preference, she needs to tell the bank. Your wife should also update any POD beneficiaries as her life changes.
Most bank accounts that are held in the names of two people carry with them what's called the "right of survivorship." This means that after one co-owner dies, the surviving owner automatically becomes the sole owner of all the funds.
If a bank account has no joint owner or designated beneficiary, it will likely have to go through probate. The account funds will then be distributed—after all creditors of the estate are paid off—according to the terms of the will.
Banks don't generally require or usually even request holders of checking accounts to name a beneficiary. As a result, many checking accounts and savings accounts may not have a beneficiary. However, there are good reasons to consider naming a bank account beneficiary, and the process is fairly simple.
Your financial institution can provide you with a form for each account. The person who you choose to inherit your account is referred to as the beneficiary. After your death, the account beneficiary can immediately claim ownership of the account.
Does a Beneficiary on a Bank Account Override a Will? Generally speaking, if you designate a beneficiary on a bank account, that overrides a Will. This is in large part due to the fact that beneficiary designations have the ability to (and benefit of) completely avoiding the probate process.
Account Access Rules
If your wife has an account that is only in her name, then you cannot access that account without her permission. You may deposit funds into it, but legally the only person who can access, withdraw or transfer funds is the person authorized to sign on the account.
Most joint bank accounts include automatic rights of survivorship, which means that after one account signer dies, the remaining signer (or signers) retain ownership of the money in the account. The surviving primary account owner can continue using the account, and the money in it, without any interruptions.
You must go to your bank in person to add the beneficiary to your account. Bring along your photo ID, bank account information and beneficiary information. If you want to name multiple beneficiaries, you will need each beneficiary's name and address.
A bank account beneficiary is an individual who may take over your bank account after you die. Most financial institutions allow you to designate a bank account beneficiary to traditional bank accounts, like savings accounts, checking accounts, CDs, and IRA accounts.
Contact the Bank
Present a copy of the death certificate to the bank, and request information on the account. In some cases, bank officers will be able to tell you if you were a beneficiary on the account, but they cannot give out information such as the name of any other beneficiary that might also be on the account.
With a valid beneficiary in place, funds in a bank account go to the beneficiary. That person will need to contact the bank and provide documentation to claim funds. If the beneficiary dies before the bank account owner, the assets typically go to the deceased's estate.
As discussed in the previous section, after the primary cardholder dies, the surviving spouse or estate executor should notify relevant credit card companies and close the accounts. Joint credit card accounts can continue to be used without any issues.
Naming a beneficiary indicates to the executor — the person responsible for managing a deceased's assets — where you want your money to go. That could be to a relative in need, a charity or a spouse.
Funds in accounts with rights of survivorship generally pass automatically to the other joint account holder, so these funds do not fall under the will's authority. Since the will can only control probate assets, the funds in the account cannot be distributed according to what the will says.
Anytime two individuals are joint owners of a bank account, they share equal rights to the money. Either person can freely make deposits – or withdraw funds – without express permission from the other. That means technically, either one can empty that account any time they wish.
Many financial experts will say that maintaining separate bank accounts, or having a “yours, mine and ours” system is the best way to manage your money in a marriage. “If you have two working spouses, it reduces conflict,” Laurie Itkin, a financial advisor and certified divorce financial analyst, tells CNBC Make It.
Your tax records are a good source of evidence if the account is an interest-bearing account. If you and your spouse share technological devices and browsing, you may be able to find evidence of a secret bank account by reviewing your spouse's browsing history.
If you're married, your spouse is normally your primary beneficiary and your child or children are contingent. The contingent beneficiaries will receive the proceeds on your death if your primary beneficiary dies before you do or at the same time as you do.
Some times beneficiaries want to see more detailed documents such as a Deceased's bank statement or pension documentation. Strictly speaking a beneficiary has no entitlement as of right to such documentation and it is your discretion as Executor whether or not to disclose it. The nature of the beneficiary's interest.
Once a Grant of Probate has been awarded, the executor or administrator will be able to take this document to any banks where the person who has died held an account. They will then be given permission to withdraw any money from the accounts and distribute it as per instructions in the Will.
When someone dies with an unpaid debt, it's generally paid with the money or property left in the estate. If your spouse dies, you're generally not responsible for their debt, unless it's a shared debt, or you are responsible under state law.
You are not allowed to use your spouse's credit card after they die unless you are a joint account holder on the card. If the card is in your spouse's name alone, using the card is considered fraud—even if you are an authorized user.