How Bank Accounts Are Classified
When you open a bank account at banks and financial institutions, the way it is titled determines who owns the funds during your lifetime and who receives them after your death. The law sorts every account into specific categories. The two key questions are: how many account holders own the account, and what happens to the funds when a party dies.
An account may be for a single party or multiple parties. A multiple party account may be with or without a right of survivorship between the parties. Subject to the requirements of section 14-6212, subsection C, either a single party account or a multiple party account may have a pay on death designation or an agency designation, or both.
A.R.S. § 14-6203(A)A single-party account has one owner. When that person dies, the account becomes part of their estate. A joint account has two or more owners. If survivorship rights are included, the surviving owner takes the funds automatically. If survivorship rights are not included, the deceased owner's share passes through their estate. Account holders on a joint account generally have equal access to the funds during their lifetimes.
Pay-on-Death and Agency Designations
On top of the ownership structure, two additional features are available. A pay-on-death (POD) designation names a beneficiary who receives the funds when the last surviving party dies. The beneficiary has no rights to the money while any owner is alive. An agency designation lets someone manage the account on the owner's behalf without giving that person any ownership interest or access to the funds as an owner.
An account established before or after December 31, 1994, whether in the form prescribed in section 14-6204 or in any other form, is either a single party account or a multiple party account, with or without the right of survivorship, and with or without a pay on death designation or designating an agent, within the meaning of this section and is governed by this section.
A.R.S. § 14-6203(B)This applies regardless of when the account was opened. Accounts created before the statute took effect are still classified and governed under these same categories. That consistency helps families and banks and financial institutions apply a single set of rules during estate settlement. Under the Arizona Revised Statutes, these account types include every common arrangement offered by a bank or credit union.
Choosing the right account type matters. A joint account with survivorship is different from one without it. Adding a pay-on-death designation changes what happens at death. Families should think carefully about how each account is titled and whether the arrangement matches their goals. The types of accounts include single-party, joint, POD, and agency designations, and each carries different legal consequences.