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

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 §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.