Set up a regular bank account without naming anyone else in any of the paperwork as a joint owner.  Get an estate planning attorney in your area to create a “durable general power of attorney” for you.  The power of attorney you create will allow a family member to access the bank account if needed to pay bills, etc.

With this arrangement, the account stays 100% in your name.  There is no joint owner.  It’s just 100% in your name, and then the agent in your power of attorney can make transactions from the account.

The nice thing in this arrangement is that you can still use your Last Will to direct where the money in the bank account will go when you die.  Since no one else is named anywhere on the account, the bank account will be frozen upon your death.  The money will just sit there until your Last Will makes it to court.

This is another kind of single-party account, only this time we’re adding a “POD” designation.  POD is short for “payable on death.”  The bank will ask who the beneficiary is, and that beneficiary will get all the money in the account just as soon as the bank receives a death certificate.

Note that some banks call this “transfer on death” or “TOD”. 

This “POD” / “TOD” arrangement will trump your Will.  For example, if your Will says that your son should get 50% of your money and that your daughter should get 50% of your money upon death–but all the money is in a POD account with only your daughter named beneficiary–then your daughter will end up with 100% and your son gets nothing.

You also should keep your POD account in mind when you create your Will so that you don’t end up with a son or daughter who gets to “double-dip” from  your estate by inheriting both from your POD account and your Will.

You could set up a single-party account in the name of a Living Trust instead of putting the account in your own name.  This way, technically, your Living Trust owns the bank account.  If you have a living trust, our estate planning attorneys often recommend that you transfer ownership of your accounts into your trust.  While you’re the trustee of your Living Trust, you can continue to use your accounts exactly as you always have.  There’s really no difference in how you use the account.

One nice thing about this arrangement is that it keeps the bank account out of probate court.  Since the account wasn’t technically “in your name” at death, there is no need for the account to go through probate. When you die, the Living Trust document will direct where the money in the bank account will go.

This arrangement is also helpful if you become mentally incapacitated.  The alternate trustee listed in your trust agreement will be able to take over the management of the account, without a lot of hassle from the bank.  It’s really seamless.  If you have any concerns about the trustee potentially mishandling your funds, you should probably pick a different trustee.  Plus, the trustee of the living trust has a legal obligation (a “fiduciary duty”) to only use the funds for your best interest during your lifetime. 

The negatives to this arrangement are that it’s a hassle and that’s expensive to set up.  Also, it’s unnecessary in most cases because the same goals can be achieved with easier methods.

Some banks, but not all, allow convenience accounts.  The account is technically owned only by you (a single-party account), but you give a cosigner access to the account.  Since the account is only owned by you, when you die, the money in the account will go wherever your Last Will says.  The bank will freeze the bank account until your Will goes through probate court.

A joint tenancy with right of survivorship account (often called JTWROS, ROS, or JT TEN), is not a single-party account.  With a Texas JTROS account, you basically co-own the money in the account with another person you name.  Many marital bank accounts are JTWROS (even if the spouses are unaware).  Upon the death of either account holder, the surviving account holder owns 100% of the money without any probate court involvement.

Our estate planning attorneys see clients who have inadvertently created JTROS accounts. In other words, if you go into the bank and say, “I’d like to add my daughter to my account”, without any additional comments from the bank–they’ll usually add the daughter as JTROS!  That means, without really clarifying your wishes, they basically just give your daughter your account!  So, if you want to add your daughter to your account only for the purpose of helping you (and don’t intend to actually give your daughter that account)–then speak up!  Tell the bank clearly that you only want your daughter as a “convenience signer” and not a JTROS.