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Joint Tenancy with Right of Survivorship; Joint Bank Accounts

March 19, 1984 Subject: Administration of Estates; Assets; Fees; Joint Tenancy with Right of Survivorship; Joint Bank Accounts.

 

Requested By: Major A. Joines Clerk of Superior Court Burke County

 

Question: Should the personal representative of a decedent’s estate include the decedent’s portion of funds held in a joint bank account created under G.S. 41-2.1 as an asset of the estate on which fees should be paid?

 

Conclusion: Yes.

 

G.S. 41-2.1(a) reads in part as follows: "(a) A deposit account may be established with a banking institution in the names of two or more persons, payable to either or the survivor or survivors, with incidents as provided by subsection (b) of this section. . . ." [Emphasis added]. Therefore, if the account is one that is created in accordance with G.S. 41-2.1, the account will have the incidents set out in subsection (b) and will not follow the common law principles in regard to the right of surviorship.Subsection (b) reads in part as follows:

"(b) A deposit account established under subsection (a) of this section shall have the following incidents:

. . .

(3)
Upon the death of either or any part to the agreement, the survivor, or survivors, become the sole owner, or owners, of the entire unwithdrawn deposit, subject to the following claims listed below in subdivisions a. through e. upon that portion of the unwithdrawn deposit which would belong to the deceased had the unwithdrawn deposit been divided equally between both or among all the joint tenants at the time of the death of the deceased:
a.
The allowance of the year’s allowance to the surviving spouse of the deceased;
b.
The funeral expenses of the deceased;
c.
The cost of administering the estate of the deceased;
d.
The claims of the creditors of the deceased; and
e.
Governmental rights.
(4)
Upon the death of one of the joint tenants provided herein the banking institution in which said joint deposit is held shall pay to the legal representative of the deceased, or to the clerk of the superior court if the amount is less than two thousand dollars ($2,000), the portion of the unwithdrawn deposit made subject to the claims and expenses as provided in subdivision (3) above, and may pay the remainder to the surviving joint tenant or joint tenants. Said legal representative shall hold the portion of said unwithdrawn deposit paid to him and not use the same for the payment of the claims and expenses as provided in subdivision (3) above unless and until all other personal assets of the estate have been exhausted, and shall then use so much thereof as may be necessary to pay said claims and expenses. Any part of said unwithdrawn deposit no used for the payment of said claims and expenses shall, upon the settlement of the estate, be paid to the surviving tenant or tenants."

G.S. 41-2.1(b)(4) is specific and detailed, and its provisions are directory and require that the appropriate portion of the bank account be delivered to the personal representative. There is no doubt that the statute contemplates that the personal representative take control of the funds. The fact that the funds are not to be used if other assets of the decedent are available merely creates a preference and does not change the nature of the funds as assets of the estate. "Amounts paid to the personal representative pursuant to G.S. 41-2.1 are treated as assets of the estate for purposes of computing the size of any bond required and computing the amount of any commission payable. See 40 N.C. A.G. 23 (1970), 42 N.C. A.G. 315 (1973)." Edwards, North Carolina Probate Handbook, § 28-7.

To the extent that G.S. 28A-15-10(a) may be interpreted to be inconsistent with G.S. 41-2.1, the latter statute would control because G.S. 28A-15-10(a) is a broad statute and refers to many types of assets, in fact it also refers to joint bank accounts with the right of survivorship that are created other than under the provisions of G.S. 41-2.1. It is a rule of construction that the specific controls the general, 12 Strong’s N.C. Index 3d, Statutes § 5.8, and therefore G.S. 41-2.1(b)(4) will control the management of a bank account established under G.S. 41-2.1.