Are Joint Accounts Subject to Probate? Rules, Risks & Best Alternatives

Joint accounts are a popular estate planning tool, but confusion lingers about whether they shield assets from probate. The short answer? Most joint accounts bypass probate—if structured correctly. However, exceptions and state-specific rules can trip up even savvy planners. Here’s what you need to know to protect your assets and heirs.

How Joint Accounts Typically Avoid Probate?

When two or more people own a joint account with rights of survivorship (JTWROS), the surviving owner automatically inherits the asset upon the other owner’s death. This transfer happens outside of probate, saving time and legal fees. Common examples include:

• Bank accounts (checking, savings, CDs).
• Real estate (e.g., a home titled as “joint tenants with rights of survivorship”).
• Brokerage accounts (stocks, bonds).
• Vehicles (in states allowing joint ownership with survivorship).

Key phrase: “Right of survivorship” must be explicitly stated on the account or deed. Without it, the asset may still go to probate.

When Joint Accounts Can Be Subject to Probate

1. All Joint Owners Die Simultaneously:
   • If all account holders die (e.g., in a car accident), the asset passes to their estates and enters probate.
2. No Right of Survivorship:
   • Accounts labeled as “tenants in common” (TIC) do not avoid probate. The deceased’s share goes to their estate.
3. Disputes Among Heirs:
   • If a surviving owner is challenged (e.g., claims of undue influence), a court may freeze the account during litigation.
4. Creditor Claims:
   • In some states, creditors can pursue joint accounts to settle the deceased’s debts.

Related article for you:
Do Probate Attorneys Work on Contingency? What Heirs & Executors Must Know

State-Specific Rules to Know

• Florida: Joint accounts with rights of survivorship are protected from probate (Fla. Stat. § 655.79), but the deceased’s creditors can still claim funds for up to 2 years.
• California: Community property with survivorship (CPWROS) avoids probate for spouses (Cal. Probate Code § 5302).
• Texas: Joint accounts are presumed to have survivorship rights, but disputes require a written agreement (Tex. Estates Code § 439A).
• New York: “Convenience accounts” (where a co-owner can’t inherit) don’t avoid probate (NY Banking Law § 675).

Types of Joint Accounts and Probate Outcomes

Account Type	Probate Status	Example
Joint Tenants with Survivorship	Avoids probate	Spouses’ shared checking account
Tenants in Common	Goes to probate	Siblings owning a rental property
Payable-on-Death (POD) Account	Avoids probate	Bank account with named beneficiary
Community Property with Survivorship	Avoids probate (CA, TX, etc.)	Married couple’s home in Texas

Risks of Using Joint Accounts to Avoid Probate

While joint accounts simplify inheritance, they come with pitfalls:

• Loss of Control: Adding a co-owner (e.g., an adult child) gives them equal access to funds.
• Creditor Exposure: The surviving owner’s creditors can seize the entire account.
• Family Disputes: Siblings may challenge a parent’s decision to add one child as a joint owner.
• Medicaid Penalties: Joint accounts can count as assets, affecting eligibility for benefits.

Better Alternatives to Joint Accounts

If joint accounts feel risky, consider these probate-avoidance tools:

1. Payable-on-Death (POD) or Transfer-on-Death (TOD) Designations:
   • Name beneficiaries directly without granting account access.
2. Revocable Living Trusts:
   • Maintain full control while alive; assets transfer privately at death.
3. Lady Bird Deeds (FL, TX, MI):
   • Retain lifetime control of real estate but automatically transfer it at death.

FAQs

Does a joint account override a will?

Yes. Joint accounts with survivorship rights transfer automatically, regardless of the will’s terms.

Can a joint account be contested?

Yes. Heirs may claim undue influence if a new co-owner was added shortly before death.

Are joint accounts taxed when an owner dies?

No federal taxes, but some states (e.g., PA) impose inheritance taxes on non-spousal transfers.

How to Set Up a Joint Account Properly

1. Confirm your bank or title company uses “joint tenants with rights of survivorship” language.
2. Avoid adding minors—they can’t control accounts until adulthood.
3. Update accounts after major life events (e.g., divorce, death of a co-owner).

When to Consult an Attorney

• You’re adding a non-spouse (e.g., a caregiver) to an account.
• The estate has significant debts or complex assets.
• You’re in a blended family or anticipate disputes.

Key Takeaway

Most joint accounts with survivorship rights avoid probate, but they’re not foolproof. To safeguard your assets:

• Use explicit survivorship language.
• Consider trusts or TOD designations for added protection.
• Review your plan every 3–5 years or after major life changes.

For state-specific guidance, visit your local probate court website (e.g., Texas Law Help) or consult an estate planning attorney. A little foresight today can spare your heirs a legal maze tomorrow.

Need Help?

• Download free probate-avoidance checklists: American Bar Association
• Find local attorneys: National Academy of Elder Law Attorneys