What is a Right of Survivorship form?
Filling out a right of survivorship form at the bank prevents a jointly held bank account from being frozen upon the death of one of its owners, such as a parent or a spouse. This allows the remaining account holders to continue using the account without interruptions.
What happens when one of the owners of a jointly held account passes away?
By law, if one of the owners of a jointly held bank account passes away, the account is automatically frozen until either an inheritance order is obtained or, if a will exists, a probate order is issued.
Significant economic hardship together with grief.
Due to the legal stipulations described above, many who did not complete a right of survivorship form at the bank discover that they cannot access the joint account and are unable to cover daily expenses during the difficult time after a loved one’s passing.
They may be unable to pay for funeral arrangements or expenses during the mourning period, and often struggle to manage without access to funds for several months, until the appropriate court orders are issued.
A simple solution – filling out a right of survivorship form.
This should be done in advance, and constitutes an agreement by all account holders that, in the event of one holder’s death, the account will not be frozen and the surviving holders can continue using it freely.
Note: a right of survivorship form does not override the legal rights of heirs under an inheritance order or probate order. If it is found that an account holder misused the funds or took money that did not belong to them, they will be required to return it to the rightful heirs.
So what should you do tomorrow morning?
All account holders should agree to sign a right of survivorship form. Afterwards, each account holder must visit the bank to complete the process.
This way, you can ensure that, in the event of one account holder’s passing, the remaining holders can continue managing their finances without also facing cash flow issues during their time of mourning.
Three more important notes
- When opening a new bank account, ask to sign a right of survivorship form in advance, or ensure it is included in the account opening documents.
- Make sure that the right of survivorship clause you are signing is not time-limited and will remain valid.
- The right of survivorship clause applies only to account holders. It does not apply to an authorized signatory or power of attorney on the account, as such authorizations automatically expire upon the account holder’s death.
