The Confusion Surrounding Joint Bank Accounts in New York is epic.
In their article The Confusion Surrounding Joint Bank Accounts in New York, the authors, Francine R.S. Lee and Elisa Shevlin Rizzo write:
"The problems associated with joint bank accounts have their roots in the beginning of the last century, when, in 1907, New York was the first state to enact legislation authorizing the payment of the funds deposited into a joint account to the surviving co-owner. Controversy and confusion quickly followed, as there were questions as to whether the survivor was entitled to the account or whether joint accounts were presumed to be for convenience only. The law was amended in 1909 to provide that a joint tenancy was created when an account was opened in the name of the depositor and another in a form that would allow payment to either individual or to the survivor. Although a right of survivorship was presumed, the courts allowed the estate of the depositor to rebut this presumption by proving that the account was opened for convenience only and there was no intention to make a gift to the other individual. As a result, "[the] quest for simplicity and certainty [with regard to joint accounts] turned out to be elusive." It is worth noting that the original impetus for the statute was not to provide clarity to the account holders, but to provide protection to the banks so as to allow for funds to be paid to the survivor of a joint account without liability.
In 1990, the statute [NYBL Section 678] became part of the New York Banking Law (NYBL), in part to remedy the problems caused by NYBL §675 by providing for so-called "convenience accounts." Very generally, convenience accounts allow the depositor to retain ownership rights to the deposited funds while enabling the other account holder to act on behalf of the depositor. Despite the statutory authorization for convenience accounts, they do not appear to be widely available and have not solved the problems associated with traditional joint accounts."
The Confusion Surrounding Joint Bank Accounts in New York is a must read for anyone who has a joint account in New York or advises those that have a joint account in New York!