Joint account holders vs beneficiaries (2024)

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Understand the differences.

2-minute read

What is the difference between a joint account holder and a beneficiary?

A joint account holder shares the account with the primary account holder. Joint account holders have the same rights and access to an account as the primary account holder. A joint account holder can designate beneficiaries to the account without authorization from the primary account holder.

A beneficiary has no rights or access to your accounts. Beneficiaries can only receive the money in your accounts in the event of your passing.

Beneficiaries can become joint account holders if you would like them to have access to your money before you pass. If your account already has a joint account holder, you do not need to designate them as a beneficiary.

More key differences between joint account holders and beneficiaries

Joint account holdersBeneficiaries
Do they currently have access to my account?Yes, they have equal access and rights to your account.No, unless they are also joint account holders on your accounts.
What happens upon my passing?They have full ownership of the available money in the account.1If there are no joint account holders, the money is divided equally among all beneficiaries.
Do they have to be UNFCU members?No. To keep the money at UNFCU upon your passing, they will need to become a member if they are eligible to join.2No, but the transfer of wealth is easier if eligible2 family members become UNFCU members.
How many can I add to my account?Only one person per account.Up to five beneficiaries per account.3 This includes people, trusts, and organizations.

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Disclosures

  1. Joint account holders who are not already UNFCU members will need to contact UNFCU so that we can transfer the money into their personal deposit account.
  2. View eligibility requirements.
  3. You can add up to five beneficiaries per account in Digital Banking. To add additional beneficiaries, you will need to contact us.

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FAQs

Joint account holders vs beneficiaries? ›

Beneficiaries can only receive the money in your accounts in the event of your passing. Beneficiaries can become joint account holders if you would like them to have access to your money before you pass. If your account already has a joint account holder, you do not need to designate them as a beneficiary.

What is the difference between account holder and beneficiary? ›

As the account owner, you control the money, and you can add, modify or remove beneficiaries at your discretion. Beneficiaries have no ownership or right to the funds in the account while the account holder is alive. You can have multiple beneficiaries and allocate different percentages to each one.

Does a joint bank account automatically go to the survivor? ›

The Uniform Probate Code (UPC) and Joint Bank Accounts:

This means that if no specific language is included in the account agreement indicating a different intention, the surviving account holder(s) will automatically assume ownership of the funds.

Does a joint account override a will? ›

Yes, joint ownership of an account overrides a Will. The joint ownership will be effective over and supersede any directions in your Last Will and Testament regarding a specific account and how those assets are divided.

Who owns the money in a joint bank account when one dies? ›

Joint Bank Account Rules on Death

"The joint owner becomes the legal and equitable owner of all funds in a joint account at the instant of death," says Doehring. "It does not become part of the probate estate."

Does a beneficiary on a bank account supersede a will? ›

Bank account beneficiary vs. will

Generally, a will does not override banking beneficiary designations listed on the bank account. This is because most bank accounts are considered non-probate assets, meaning they pass directly to the designated beneficiary without being subject to the terms of a will.

Can you still withdraw money from a joint account if one person dies? ›

Joint bank accounts

If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need the see the death certificate in order to transfer the money to the other joint owner.

Is a joint bank account considered inheritance? ›

It depends on the account agreement and state law. Broadly speaking, if the account has what is termed the “right of survivorship,” all the funds pass directly to the surviving owner. If not, the share of the account belonging to the deceased owner is distributed through his or her estate.

What happens if you have a joint bank account and one person dies? ›

Most joint bank accounts include automatic rights of survivorship, which means that after one account signer dies, the remaining signer (or signers) retain ownership of the money in the account. The surviving primary account owner can continue using the account, and the money in it, without any interruptions.

How do beneficiaries work on joint accounts? ›

A joint account holder can designate beneficiaries to the account without authorization from the primary account holder. A beneficiary has no rights or access to your accounts. Beneficiaries can only receive the money in your accounts in the event of your passing.

Should I be added to my elderly parents bank account? ›

You could jeopardize your parent's financial security if you have financial challenges. For example, creditors can take the money in the joint account as collateral to settle your debts. Additionally, the funds in the joint bank account can also affect your eligibility to qualify for college financial aid.

Do you have to remove a deceased person from a joint bank account? ›

Many banks have a rule of survivorship in their joint bank account agreement. The rule of survivorship states if you open a joint bank account and one person dies, the surviving owner automatically takes over the account, superseding any instructions outlined in a will.

Do banks freeze accounts when someone dies? ›

A deceased account is a bank account, such as a savings or checking account, that's owned by a deceased person. A bank will freeze the account when it receives notice that a customer has died while waiting for direction from the authorized court regarding payment to heirs and creditors.

Is money in a joint account part of an estate? ›

Money in joint accounts

Normally this means that the surviving joint owner automatically owns the money. The money does not form part of the deceased person's estate for administration and therefore does not need to be dealt with by the executor or administrator.

Why are joint bank accounts bad? ›

Lack of privacy: While keeping secrets is never a great idea in relationships, you and your partner may want some degree of privacy in how you spend your money, which you won't get from having joint accounts. It could also be harder to pull off gifts for each other if your partner can see every purchase you make.

Does beneficiary name mean account holder name? ›

Meaning. The beneficiary is the person or entity who will receive the funds or benefits in case of an event, such as the account holder's demise. A nominee, on the other hand, is a person designated by the account holder to receive the assets or funds in the event of their death.

What is the account holder? ›

The account holder is the person who signs the contract for said account with the bank; this person will also be the owner of the money it contains. Furthermore, if there are any debt due to having taken out a loan, this person will be liable for the tax obligations.

Who is the beneficiary bank account holder? ›

Definition of a bank account beneficiary

A bank account beneficiary is an individual who inherits your bank account after you die. Most financial institutions allow you to designate at least one beneficiary on deposit accounts, like savings accounts, checking accounts, and CDs.

What is the beneficiary of an account holder name? ›

In the context of banking and investments, a beneficiary is someone who is designated to receive the proceeds or assets of a financial account or investment in the event of the account holder's death or under certain specified circ*mstances. Naming a beneficiary is a crucial step in financial planning.

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