Rights of survivorship are designed to make life a little easier after a loved one dies. If two people are joint holders on a single account and one dies, right of survivorship grants the other account holder access to the funds without having to go through probate. This can be a lifesaver if the other account holder is relying on the funds to pay bills, but it can also have unintended consequences.
Benefits and Pitfalls
Accounts are assumed to be nonsurvivorship accounts, in which case the money would pass through the deceased's estate before being distributed. If you intend to include right of survivorship with your account, make sure the bank has the necessary boxes checked on the paperwork. But the right of survivorship can unintentionally thwart your wishes for the distribution of your estate. For example, if you want to split your estate equally between your children but name one daughter as a joint account holder with rights of survivorship as your health deteriorates, the money in the account passes to that daughter without first becoming part of the estate when you die. Your daughter would not be obligated to split the account assets with her siblings.
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