Although most would assume that by placing your initials by an “x” in a signature box titled “multiple-party with right of survivorship on a signature card at a financial institution,” a Tyler court has ruled (which was upheld on appeal) that it is insufficient under the Texas Estates Code to create survivorship rights in the surviving party.

The court ruled that the Texas Estates Code requires language that is substantially similar to the law which states “on the death of one party to a joint account, all sums in the account vest in and belong to the surviving party as his or her separate property and estate.” Thus, Texas law requires more than just checking a box as to the right of survivorship account. Therefore, anyone with a joint or multi-party account with right of survivorship should review their signature card to see if there is compliance with Texas law.

It should be noted that many are under the mistaken impression that all is necessary for an estate plan is to have some sort of beneficiary designation. This fails to consider planning for the realities of life as sometimes beneficiaries: (1) are disabled or lack mental capacity and cannot handle the inheritance potentially resulting in a possible need for guardianship and possibly resulting in a loss of public benefits; (2) get sued whereas the funds could have been protected with proper planning; (3) die first resulting in possible change in the intended plan; or (4) have marital problems at the time of death of the account beneficiary. These possibilities could cause havoc on the intended estate plan.

Would you die if your multi-party account with right of survivorship might pass differently than you planned?

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Questions? Contact us at Michael B. Cohen & Associates

Michael B. Cohen & Associates
12201 Merit Drive | Suite 230 | Dallas 75251
Phone: (214) 720-0102