How Same-Sex Couples Should Set Up Their Individual Bank Accounts

Many gay and lesbian couples decide to share a joint checking account. The process is painless, and the bank sets up the account with the partners as joint tenants. It doesn’t have to be a checking account: it can also be a savings account, COD, or various other types of accounts. The most common form of joint tenancy over bank accounts is joint tenants with the right of survivorship.

You can set it up whether checks and withdrawals require a signature from just one of the partners, or you can set it up where the signature of both partners are required.

If one partner dies, the other partner automatically has access to the full amount in the joint checking account, so no probate stands in the way.

Individual Accounts

But sometimes partners each have their own, separate checking accounts as well. The money in these accounts will be subject to probate if the partner dies. Often the best way to ensure that these individual accounts are not subject to probate is to set them up as a payable-on-death (or POD) account.

A POD account lets the account holder designate a beneficiary who will automatically receive the money from the account upon the death of the account holder. The key is that the beneficiary has no interest in the account while the account holder is still alive. The beneficiary can’t access the account, can’t get information about it, can’t learn the balance, and so on.

Instead, the beneficiary only obtains an interest in the money when the account holder dies.

If the beneficiary (usually the account holder’s partner) dies before the account holder, then the funds will just stay in the account holder’s estate when the account holder dies unless the account holder names an alternate beneficiary.

In summary, there is no good reason not to set up your individual bank accounts as POD accounts. The money is going to go to someone if you die, and by setting up a POD you can transfer the money in the account without it going through the long, cumbersome probate process.

About Gideon Alper

Gideon Alper
Gideon is a Florida attorney that focuses on gay adoption, LGBT estate planning, and second parent adoption.

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