Part 2: When “Ours” Isn’t Legally Yours—Bank Accounts & Co-Ownership Confusion
Introduction
When a loved one dies, grief is hard enough. But for many Minnesota spouses and family members, that grief is compounded by an unexpected—and often devastating—financial roadblock: they can’t access the very accounts they relied on to pay everyday expenses.
Even accounts they believed were “shared” can be locked down if the legal paperwork says otherwise. This problem is more common than you might think—and it can happen to anyone, regardless of how long you’ve been married, how close your family is, or how much trust you had in verbal agreements.
Real-Life Scenarios
The frozen household account: A married couple pays all their bills from one checking account—but only one spouse’s name is on it. After that spouse dies, the bank freezes the account. The surviving spouse suddenly has no access to the funds needed to cover the mortgage, utilities, or groceries.
The unfulfilled promise: An adult child is told they’ll inherit a parent’s investment account. But when the parent passes, the account has no beneficiary listed, no joint owner, and isn’t in a trust. The child has to go through probate—costing time, money, and unnecessary stress—before they can access the funds.
The will vs. the title: A parent’s will names a certain child as the beneficiary of a savings account, but the account title or beneficiary designation is outdated. Legally, the title on the account controls—not the will—and the funds may end up going to someone entirely different.
The Fallout
When account ownership isn’t set up correctly, the consequences can be immediate and severe:
Bills go unpaid because the surviving spouse or family member can’t access the funds.
Funds are frozen until probate is completed, which could take months.
Court delays and legal fees add financial strain on top of emotional loss.
Family tensions rise as heirs argue over who should get the funds, especially if the deceased left conflicting instructions.
Minnesota-Specific Rules You Should Know
Probate threshold: In Minnesota, if the total value of a deceased person’s probate assets is $75,000 or less (and there is no real estate in their name alone), heirs may be able to use a Small Estate Affidavit instead of a full probate case to claim funds. This can be faster and less expensive—but only if the account qualifies.
Payable-on-death (POD) & transfer-on-death (TOD) designations: Minnesota banks, credit unions, and investment institutions recognize POD and TOD designations as a way to bypass probate entirely. Funds go directly to the named beneficiary once a certified death certificate is presented.
Joint accounts: In Minnesota, most joint accounts are considered “joint tenancy with right of survivorship” unless the account agreement says otherwise. This means the surviving account holder automatically becomes the sole owner at death. However, if the account isn’t truly joint (for example, a “convenience account” set up just for paying bills), the rules may be different.
Out-of-state accounts: If the account is held outside Minnesota, your state’s rules won’t necessarily apply. You’ll need to follow the laws of the state where the account is located.
How to Avoid This
Add joint owners to critical accounts you want someone to have immediate access to.
Name payable-on-death (POD) or transfer-on-death (TOD) beneficiaries so accounts pass directly to the intended person without probate.
Include accounts in your revocable living trust so they’re protected and can be accessed quickly after your death.
Review ownership and beneficiary designations regularly to ensure they still align with your wishes and Minnesota’s rules.
Coordinate your estate planning documents with how your accounts are titled—your will alone does not control accounts with designated beneficiaries or joint ownership.
👉 Takeaway:
Financial institutions don’t recognize good intentions—they recognize paperwork. In Minnesota, simple steps like adding a POD/TOD beneficiary or retitling an account can mean the difference between your loved ones having immediate access to funds or being locked out for months.
Now’s the time to review your account ownership, beneficiary designations, and estate plan together to make sure they match—and to ensure the people you love won’t face financial hardship during an already difficult time.
Part 2: When “Ours” Isn’t Legally Yours—Bank Accounts & Co-Ownership Confusion