Our deposit agreements do not specify that co-owned accounts are presumed to be joint accounts with the right of survivorship. When an account co-owner dies, do the funds in the account belong to the surviving co-owner?

In our view, the funds belong to the surviving account owner, provided that the account agreement permitted all account owners to withdraw funds, and the joint account was not established as a convenience account.

The Illinois Supreme Court has interpreted the Joint Tenancy Act to require a signed agreement “permitting payment to the survivor” in order to create a joint tenancy with a right of survivorship in a bank account. A subsequent lower court found that an account agreement giving any signer the right to withdraw account funds is sufficient language to “permit payments to a survivor.” In that case, the court determined that it is preferable to find “a right of survivorship in most cases where accounts are held in two names, unless there is a clear indication to the contrary,” than to “depend on the form the bank happened to be using at the moment, or the advice given the parties by a bank employee.”

Consequently, we do not believe a joint account must expressly reference a right of survivorship in order for the surviving account owner to continue to control the account funds. However, we note that Illinois law recognizes the existence of “convenience accounts.” An example of a convenience account is “an account where the creator only wanted the other tenant to write checks at the creator’s direction, and not to have any share in the account during the creator’s life or on the creator’s death.” If an individual establishes a joint account as a convenience account, then the funds pass to the deceased owner’s estate, rather than to the surviving joint tenant.

For resources related to our guidance, please see:

Joint Tenancy Act, 765 ILCS 1005/2(a) (“When a deposit in any bank . . . transacting business in this State has been made or shall hereafter be made in the names of 2 or more persons payable to them when the account is opened or thereafter, the deposit or any part thereof or any interest or dividend thereon may be paid to any one of those persons whether the other or others be living or not, and when an agreement permitting such payment is signed by all those persons at the time the account is opened or thereafter the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payments so made.”)

Doubler v. Doubler, 412 Ill. 597, 601 (1952) (“In our opinion, therefore, the proper construction of the section here involved under the facts of this case is that an agreement signed by [the husband] and [the wife] permitting payment to the survivor was necessary to create rights of survivorship in the deposit and that the changing of the names on the account by a third party, the bank cashier, at the direction of one of the parties alone, is insufficient to satisfy the requirements of the statute.”)

In re Est. of Harms, 603 N.E.2d 37, 42 (Ill. App. 4th Dist. 1992) (Appellate Court held that a checking account opened in the name of three parties with an account agreement that states “[a]ny one of the persons who signs this agreement may withdraw all or any portion of the account balance” is sufficient to create a joint tenancy with right of survivorship, despite that the “Joint—With Survivorship” check box on the agreement was left blank.)

In re Est. of Harms, 603 N.E.2d 37, 42 (Ill. App. 4th Dist. 1992) (“Compliance with section 2(a) of the Act may lead to a finding of a right of survivorship in most cases where accounts are held in two names, unless there is a clear indication to the contrary, but we see that result as superior to a rule where the result would depend on the form the bank happened to be using at the moment, or the advice given the parties by a bank employee.”)

In re Est. of Harms, 603 N.E.2d 37, 41 (Ill. App. 4th Dist. 1992) (“A ‘convenience account’ is an account, apparently held in some form of joint tenancy, where in fact the creator did not intend the other tenant to have any interest, present or future, but had some other intent in creating the account. An example of a convenience account is an account where the creator only wanted the other tenant to write checks at the creator’s direction, and not to have any share in the account during the creator's life or on the creator’s death.”)