Can a bank close a joint account after a person dies when the other account holder is still alive?

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Can a bank close a joint account after a person dies when the other account holder is still alive?

My mother and sister had a joint bank account with Navy Federal Credit Union. My
Mother was the primary account holder. However, my Mother passed away last year
and NFCU in March just closed the joint account and confiscated the 610.42 that
was left in the account. Can a bank just close down a joint account and grab the
funds? Isn’t the joint account holder supposed to inherit or take over the
account?

Asked on July 18, 2017 under Estate Planning, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, the joint holder gets the money. The bank cannot take simply take it as a general rule (though they can close the joint account and put the money into a new non-joint account for the survivor). However, if your mother owed more than the amount in the account, they likely *could* do this. While you'd need to check your mother's various agreements with the bank to be sure (e.g. her credit card agreement; her account agreement; etc.), they generally provide that if the accountholder owes the bank money--and all debts come due immediately on death--the bank can take the money from her accounts. If any of the agreements between your mother and bank provided this, taking the money was legal; in this case, your mother would have contractually agreed to let the bank do this.


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