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Home >> Accounts >> Checking Accounts
Setting Up Accounts for Spousal Access
Both of my parents have an individual checking account. Besides waiting on probate, what is the best way to make sure that if one dies, the other spouse receives the money in the other's account?
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 There are a couple of solutions to consider, and which one is best may depend on the reasons your parents have chosen to keep their checking accounts separate. The obvious option is to combine the accounts into a single, joint checking account with right of survivorship. Such an account automatically becomes the property of the surviving joint owner on the death of the other owner.
Less obvious, and perhaps a better solution, is for each of your parents to designate his/her account as payable on death (POD) to the other spouse. Depending on state law, the accounts can either be tagged by the bank, at your parents' direction, as payable on death, or as Totten trust accounts (owner in trust for beneficiary). In either case, the designation is fully revocable by the account owner during his/her lifetime, the beneficiary has no legal right to the account during the account owner's lifetime, and the account avoids probate going directly to the beneficiary on the owner's death. If your parents have an estate plan, they should discuss options with their estate planning professional before making any changes.
Published on BankingQuestions.com 1/09/09
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