ABSTRACT
Joint bank accounts, once known as a ‘poor man’s will’, emerged more than a century ago as a probate avoidance device. This Article contends that joint accounts no longer serve a useful estate planning function, and they pose an unacceptably high risk to banking consumers because the legal framework governing lifetime ownership rights is deeply flawed and underdeveloped. Courts typically apply one of two prevailing models for allocating lifetime rights: the traditional joint tenancy approach, which presumes equal ownership of account funds by each party, and the Uniform Probate Code’s approach, which presumes ownership in proportion to each party’s net contribution.
Neither ownership model is well-suited to implement the depositor’s actual intent and both are plagued by unacceptable levels of uncertainty. Most depositors (except for married couples) do not open a joint account for the purpose of lifetime gifting, so the joint tenancy presumption of equal ownership is contrary to majoritarian preferences. The net contribution rule, conversely, presumes no lifetime gifting between unmarried joint accountholders, but it requires parties to preserve evidence of their net contribution, an unrealistic expectation when joint accounts remain in use for years or decades. Moreover, both presumptions can be overcome by evidence of contrary intent. As a result, joint accounts have generated a hotbed of litigation in three troublesome contexts: (1) disputes among joint accountholders when parties withdraw more than their net contribution; (2) garnishment proceedings by creditors seeking to attach joint account funds to satisfy non-joint debts; and (3) criminal prosecution of embezzlement and larceny from joint accounts.
This Article makes three novel claims: first, in light of widespread acceptance of payable-on-death accounts, that joint accounts no longer serve any useful function outside marriage; second, that joint account ownership disputes are frequent and expensive to litigate; and third, that most depositors who open joint accounts do not understand the attendant risks. It then reports findings from an original empirical field test in which funds supplied by the authors were used to open a series of joint accounts to document onboarding procedures currently used by banks for new accounts. That study revealed that bank clerks provide little-to-no information about lifetime ownership rights during the onboarding process, that written account agreements (provided only after the initial deposit) are generally silent regarding the rights of joint depositors as against each other, and that some banks fail to provide any written disclosures at all.
The Article concludes with a menu of reform options designed to deter depositors from using joint bank accounts except within marriage.
Weisbord, Reid K and Sterk, Stewart E, Joint Bank Accounts: Who Needs Them? (February 16, 2025), Rutgers Law School Research Paper Forthcoming; Cardozo Legal Studies Research Paper Forthcoming; Iowa Law Review (forthcoming 2025-26).
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