What is the Right of Survivorship?

The right of survivorship is very powerful and extremely difficult to challenge. This right means if one owner passes away, the surviving owner automatically inherits the deceased owner’s share without having to go through the probate process.

Which Ownership Includes a Right of Survivorship?

A right of survivorship arises when property is jointly held. For real property, i.e. a house or tract of land, there are two types of ownership that include the right of survivorship: (1) joint tenancy with the right of survivorship and (2) tenants by the entirety, which requires a couple to be married when they retain ownership of the asset. For assets like bank and investment accounts, any two owners enjoy survivorship rights regardless of marital status.

The Risks of Adding a Joint Owner for Convenience

As people become elderly or health declines and it becomes harder for them to transact their own business, out of convenience, some will add a child or a trusted person as a secondary owner of bank accounts. While putting a power of attorney on file with a bank or investment institution can achieve the same goal, some choose to give access to another person by putting their name directly on the account. Caution to those who want to add a joint owner for the sake of convenience, it can lead to conflict among family members when an individual passes and the surviving joint owner automatically becomes the full owner of the account.

How Joint Tenancy with Right of Survivorship Affects Bank Accounts

According to New York banking law, when two or more people open a bank account and deposit cash or securities, a presumption of joint tenancy with the right of survivorship arises. For the presumption to apply, words of survivorship must appear on the signature card or ledger of the account. If one intends to leave the account assets to all children, then naming one child “with rights of survivorship” defeats your intent. Although you may wish for your child to split the money with siblings, there is no guarantee she or he will do as you wish after death. It is important to be very clear with a bank the reason for adding another person as an authorized user of the account so they can assist you in titling the account properly either as a convenience account or joint with right of survivorship.

Properly Titling Your Assets Is Key

It is crucial to understand how all your assets are owned. Regardless of what a person intended or expressed during his or her life, the way assets are titled overtakes and supersedes any verbal or handwritten wishes made during one’s life.

By Britt Burner, Esq. & Erin Cullen

Britt Burner, Esq. is a Partner at Burner Prudenti Law, P.C. focusing her practice areas on Estate Planning and Elder Law. Erin Cullen is a graduate of the Maurice A. Dean School of Law at Hofstra University. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan, and East Hampton.