Q: If I have a joint bank account with someone who dies, would the bank distribute the entire amount among his creditors?
It would be very helpful if someone has some knowledge of Pakistani law regarding this as well. Also I want to know whether this sort of thing happens with a joint current/checking account or a joint savings account. Thank you.
A:
Every state has laws regarding this situation. Usually, account holders are able to add a "Payable on Death" (POD) beneficiary to their bank accounts. It could be once beneficiary or several, and the account holder may, in some cases, state the percentage of funds from the account he wishes each POD beneficiary to receive upon his death. Financial institutions are authorized to follow the POD designation on their records unless they are on notice that the designation was revoked by will or a demand is made from a third party, such as a Personal Representative in a local or foreign probate proceeding. If the POD designation is contested the financial institution will have its attorneys get involved to see if the account just needs to be frozen or if under the applicable law and bank policies the money must be transferred to the third party. If the account is in the United States but there is a estate proceeding in Pakistan, then the bank would need to be made aware of any conflicts before the funds are released to the POD beneficiaries.
My response provides only general information and is not intended to provide you with specific legal advice, nor create an attorney-client relationship. You should not use or rely on this information without first consulting with your own lawyer and discussing your specific facts and available options in detail.
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