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Account Ownership Change
by John Burnett, BOL Guru
Guru Bio
Question: Can a existing joint account be changed to an individual account with the consent of other person, or does the account need to be closed and a new account opened?
Answer: There are not any hard and fast rules or regulations covering this situation. However, to avoid any problems later with estates or heirs or simply a former customer's memory of what he or she thought happened (or didn't happen), it is always preferable to close out the joint account and open one or more individual accounts. Using the close and open procedure also helps eliminate any problems with incorrect year-end tax reporting, etc. Remember that you don't need consent of an absent co-owner of a checking account to close the account out. Any authorized signer can do it, under the standard wording of UCC section 4-403(a) -- check your state's version of the UCC for verification. Your bank may have wording in its deposit contract that will permit closing only by an account owner.
First published on BankersOnline.com 12/10/07
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