Removing an Account Owner

While Illinois case law on this issue remains unsettled, we recommend obtaining the written consent of all joint account owners for the removal of an account owner.

There is conflicting case law in Illinois as to whether joint account owners may unilaterally remove other joint owners from an account without their consent or signatures. At least two Illinois cases have held that a joint account owner cannot remove another owner from the account or terminate the account without the other owner’s consent. However, a more recent case involving a jointly owned certificate of deposit (CD) held that one joint owner could effectively remove the other owners without their consent because the account agreement permitted the bank to pay account funds to any one of the account owners.

We are not aware of any court decisions that reconcile these apparently conflicting opinions. Because at least two Illinois courts have held that all joint owners must consent to the removal of an owner, we believe the conservative approach would be to require the written consent of all joint account owners before removing one of the owners. Alternatively, as with the case involving the jointly-owned CD, one joint owner could withdraw all of the funds from a joint account and establish a new account only for that owner.

Removing an Authorized Signer

We are not aware of any Illinois law requiring the consent of an authorized signer for the removal of an account owner or an authorized signer. Nor are we aware of any Illinois law requiring that all joint account owners consent to the removal of an authorized signer.

If your account agreements are silent as to the removal of an authorized signer from a joint account, we recommend using the same procedure to remove an authorized signer as was required to add the authorized signer. For example, if all joint account owners are required to provide written consent to add an authorized signer to the account, we recommend obtaining the written consent of all joint owners to remove an authorized signer. Conversely, if the written consent of only one joint account owner was sufficient to add an authorized signer to the account, you may consider removing an authorized signer with the written consent of only one joint owner.

For resources related to our guidance, please see:

• In re Estate of Macak, 302 N.E.2d 436, 437–38 (1st Dist. 1973) (“[T]he nature of a joint tenancy agreement is such that it may not be terminated by a unilateral action of one of the parties, even though each has the authority to draw out all of the money.”)

• Siemianoski v. Union State Bank of S. Chicago, 242 Ill. App. 390, 392, 394–95 (1st Dist. 1926) (“On September 22, 1921, after a quarrel with his wife, Rydzynski went to the bank alone and told Walter J. Prybylinski, an official of the bank, that he wanted to revoke his wife's authority ‘to draw money out’ of the account. . . . In the case at bar Rydzynski did not attempt to sever or terminate his interest in the joint account. He attempted to terminate the joint account altogether. But in our opinion the joint account could not be terminated altogether except by the mutual agreement of Rydzynski and his wife.”)

• Drenckpohl v. Barker, 625 N.E.2d 651, 656 (5th Dist. 1993) (“The provision on the back of the certificates of deposit was applicable to the joint tenants at the time the joint tenancy was created, and it permits any one of the joint tenants to receive payment on the instruments by surrendering them to State Bank. . . . According to the terms incorporated into the certificates of deposit, Velma Drenckpohl was permitted to invade the corpus of the certificates of deposit to the detriment of the other joint tenants. It is undisputed that she did so, and she deleted Merle and Wendell as joint tenants.”)

• UCC, 810 ILCS 5/4-403(a) (“ . . . If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account.”)