Joint Ownership is not as useful as a Living Trust. In fact it can be dangerous to your financial security and to the inheritance you may hope to leave. Joint ownership becomes especially dangerous when there is a second marriage, or an unmarried couple. These persons should always use a living trust, and never use joint ownership.

Brent D. Coldiron is a NAELA Member

Brent D. Coldiron is a member of National Academy of Elder Law Attorneys

Assume there is no living trust used by a couple in a second marriage. They have no children together. Each partner has children from a previous marriage. The couple have made wills that leaves their estate to all of their children in equal shares. They own everything, bank accounts, vehicles, and real property in joint tenancy with right of survivorship. They believe this is smart estate planning, and it will avoid probate. After that one spouse becomes very ill or incompetent. The competent spouse decides to not risk surviving the sick spouse, and withdraws almost all of the funds from the joint accounts, depositing them into another account in only their name, while naming his or her own children as sole payable on death beneficiaries, or making their own children joint owners of the new account. Following the death of the second spouse the left out children bring in to their litigation lawyer, the wills previously made and proof that they have been left out of the inheritance their parent intended for them. He promptly filed a suit. Should they have used joint tenancy, and not a living trust. What should have been done?

Unlike the living trust law which protects the creators of a trust, the Oklahoma banking law for jointly owned accounts is not written for the protection of the joint account owners. This law [www.oscn.net at 6 OS§ 901] protects only the bank from liability. A bank may pay the account money to either joint owner with immunity from lawsuit. This law is designed to protect only the bank. 6 OS§ 901(A) provides: “ When a deposit has been made or shall hereafter be made in any bank in the names of two or more persons, payable to any of them or payable to any of them or the survivor, such deposit, or any part thereof, or any interest thereon, may be paid to either of the persons, whether one of such persons shall be a minor or not, and whether the other be living or not; and the receipt or acquittance of the person so paid shall be valid and sufficient release and discharge to the bank for any payment so made.” Therefore when the bank pays out the money, it does not have to worry about the legal consequences that may follow to joint account owners.

The general rule is that a jointly owned bank account establishes a present estate in which both joint owners are seized of the whole account. Under this rule one joint owner is presumptively entitled to the entire amount in the account. See SOURCE WEBSITE at Baker v. Baker, 710 P.2d 129,132 (Okla. App. Div. 2 1985). And a joint ownership will continue until the death of one, or until the joint owners sever the tenancy during life. See www.oscn.net at Matter of Estate of Steen, 909 P2d 63, 67 (Okla. App. 1992). These laws tie the hands of joint account owners. A living trust can avoid these type laws. the case of Watkins v. McComber, 256 P.2d 158 (Okla. 1952) SOURCE WEBSITE  a grandmother had set up a joint tenancy bank account for the benefit of her grandchild pursuant to an oral agreement made with the child’s father. Later the grandmother changed her mind and without the knowledge of her co-owner [the grandchild], withdrew the funds and opened another joint account in her and her child’s name. The Syllabus by the Court at 159 held: “2. The appropriation or transfer of a joint tenancy estate in its entirety by one of two joint tenants without the other’s knowledge, or consent, and for the manifest purpose of defeating the cotenant’s survivorship right, is a violation of the joint tenancy agreement and is therefore void.” The grandmother subsequently died. The court held that the grandchild, who was the original joint owner, was entitled to 100% of the funds as the surviving joint tenant. The court ignored the subsequent joint account the grandmother had established as void.

The answer to the question earlier raised, what should have been done, is to consult with an experienced elder law attorney. Did the couple intend this result? Is it good for the well joint owner who decided to change the account? No. These questions should be raised with clients about what they want to do. If they do not want their spouse to have the right to change things should they themselves become ill or pass first, they will tell you. If a living trust is used, it can be tailor made to fit what the clients want done. If they want to put handcuffs on each other, should one become incapacitated or die, they can. If they want each spouse to have the ability to change things should circumstances change, a living trust can do that to. One of the key advantages to a living trust is that it is so flexible in how it can be set up by an experienced elder law attorney who is experienced in living trusts.



Brent D. Coldiron has put in place hundreds of living trusts in over 38 years of legal experience. Not a single one has ever failed. Once a trust was litigated by a disinherited child. That trust was sustained by the Court. You can have every confidence that if Brent D. Coldiron establishes your living trust, it will be well done. His living trusts will stand the test of time, and the law. Contact Brent at 405 478-5655.



  1. Usually a revocable living trust is a better tool. For example, a trust will avoid incapacity problems. With a joint tenancy deed one or both of the joint tenants could become incapacitated. That might require a guardianship. With a trust, if a trust maker becomes incapacitated, the successor trustee can step in to handle business. This is just one example of why a trust is usually better. It is always best to consult with your attorney before deciding.

  2. , the first issue should be to demtreine whether or not this is an appropriate estate planning vehicle for you or not. As Rex pointed out, do make an appointment with a qualified elder law attorney and they will give you insight you need.

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