Using Joint Bank Accounts While Avoiding Litigation

Joint bank accounts come in several shapes and sizes and can be used for a number of purposes, including use by couples to manage their finances, use by adult children and their parents when mom or dad needs help paying monthly bills, and use by parents and their minor children when teaching the kids the basics about money. However, such accounts can step into complicated legal areas related to property law, questions of donor intent, and potential exposure to gift tax.

One of the most common ways that two or more people can legally own property together is through joint tenancy. Joint tenants share equal ownership of the underlying property and have the equal, undivided right to keep or dispose of the property.  Joint tenancy carries with it a right of survivorship, meaning that when one joint tenant dies, his or her property interest is extinguished and title to the underlying assets passes directly to the other joint tenants.

Joint bank accounts carry with them many of the characteristics of the joint tenancy and it is crucial depositors pay attention to these principals when opening their accounts, including a consideration of whether the joint bank account will include a survivorship provision.

This issue was addressd in a recent Washington Court of Appeals case, Taufen v. Estate of Kirpes.

In Kirpes, the court was presented with a joint bank account shared by a decedent and her friend that included a survivorship provision. The estate argued that the decedent did not intend for the account to include this provision, and that it was unilaterally added by the bank representative upon the opening of the account. The court explained that there was a rebuttable presumption that survivorship was intended when joint bank accounts were opened, and in this case the presumption was eliminated by clear and convincing evidence of contrary intent. The court looked at the the fact that the decedent was never asked about the survivorship provision, that it was added unilaterally by the employee, and that the decedent had only instructed the banker that she wanted to “open up a joint account.”


The outcome in Kirpes was a victory for the decedent’s estate in one sense, as the account was included as an asset of the estate. On the other hand, the Court of Appeals decision was announced over four years after the account owner died, so the account proceeds were unnecessarily tied up for 50 months and the estate incurred the legal fees associated with proceedings at both the trial and appellate courts. These costs and delays could have been avoided had the depositor been aware of her options (and of how to elect them) at the time the account was opened.