IT’S TIME TO REVIEW YOUR SIGNATURE CARD –
(AT YOUR BANK OR BROKERAGE COMPANY)
By M. Keywood Deese, Vision Bank, Texoma LIVING WELL Magazine
Most people do not remember the actual details of the account forms they signed when they opened a bank or brokerage account. Below is a list of terms that control who has access to the funds during your life or would receive the account at your death.
1. Joint Ownership with the Right of Survivorship: Usually used when a husband and wife open an account. At the first one’s death, the survivor owns the account. This designation can be used between any two people. It exposes each owner to the debts of the other owner.
2. Single or Joint Ownership Account with a signer designated: The signer can sign checks, but is not an owner whose debts could expose the account to liability. The signer has no right to the account balance at the owner’s death. Elderly people often list a grown child to write checks for them.
3. Single Ownership Account with a “Pay Upon Death” instructions. The “POD” designation allows the bank to pay the balance of the account after the owner’s death – to the person designated on the “Pay On Death” form. That person does not have the right to write checks or have partial ownership of the account. That person only receives the money in the account after the owner’s death.
Each bank or brokerage firm has different ways to handle these issues, but the choices are basically the same:
- Do you want a joint owner designation whereby the other owner owns ½ of the account and can write checks immediately?
- Do you want someone else to just have the right to write checks on your behalf, but not own any of the account?
- Do you want someone to receive the balance in the account at your death and use the POD designation? You can list two people – like your son and daughter – to be the POD recipients and share the balance equally.
In conclusion, if you have not checked the status of your “Signature Card” at the bank for many years, you might want to check it.
M. Keywood Deese is senior vice President & trust Officer at Vision Bank of Ada, OK.