Effect of Signature Card on Disposition of Joint Bank Account upon Death of Co-Owner Under New York Banking Law

Biagi Jb

doi:10.4172/2169-0170.1000141

Abstract

It is a common practice for people to open a bank account in the name of one or more owners (a/k/a co-owners) and not just in the name of a single person alone. It is also common for an individual to be added to the ownership of an existing account once it has been established. Oftentimes spouses, friends, family or business associates decide for various reasons, both financial and personal, to establish a joint bank account and hold it as co-owners. Furthermore, as the population ages, it has become a common practice for elderly individuals to place another person’s name on a bank account, effectively creating a joint account arrangement for a once individually held account. As is often the case when multiple parties share in a financial transaction, disputes can arise as to the disposition of the funds held in such an account, either during life or at death. In order to address this issue, New York, a major world financial center, has put in place specific legislation to address the disposition of a joint bank account governed by the laws of that State. In this article, the author discusses New York Banking Law (“BL”) §675 and its application to the transfer of funds held in a joint account at the death of a co-owner, paying particular attention to the effect of the account’s signature card on the issue.

Highlights

New York Banking Law (“BL”) §675 provides that when a deposit has been made with a banking organization transacting business in New York in the name of a depositor and another person and in a form to be paid or de
BL §675 creates requirements for the imposition of this principle, and New York law addresses the disposition of the funds in a joint bank account if this rule is inapplicable
The New York Banking Law achieves this result by creating a presumption that, in the absence of fraud or undue influence, the parties intended to create a joint tenancy, vesting title in the survivor upon the death of one of the account holders

Summary

Introduction

New York Banking Law (“BL”) §675 provides that when a deposit has been made with a banking organization transacting business in New York in the name of a depositor and another person and in a form to be paid or de-. The New York Banking Law achieves this result by creating a presumption that, in the absence of fraud or undue influence, the parties intended to create a joint tenancy, vesting title in the survivor upon the death of one of the account holders. This concept is referred to as “survivorship” or “rights of survivorship” The Courts have consistently held that this presumption may not apply if the signature card for the account fails to contain language indicating a right of survivorship or is lost or unavailable

Importance of Account Signature Card

Conclusion