A.R.S. § 14-6226

When a Bank Is Protected After Paying Out an Account in Arizona

Verified April 4, 2026 • 57th Legislature, 1st Regular Session

Arizona law protects financial institutions from liability when they pay out account funds according to the account type on file. Once the bank follows the terms of the account, it is discharged from claims, even if a dispute exists about who truly owns the money. However, a written notice from an interested party can pause payments.

Title 14, NONPROBATE TRANSFERS

azleg.gov

How the Discharge Protection Works

When a financial institution pays out a POD, joint, or agency account according to its terms, this statute shields the bank from liability. The bank does not have to investigate who actually owns the money or whether the account terms reflect the parties' true intentions. It just follows the designation on file.

A payment made pursuant to this article in accordance with the type of account discharges the financial institution from all claims for these amounts, whether or not the payment is consistent with the beneficial ownership of the account as between parties or beneficiaries or their successors.

A.R.S. § 14-6226(A)

This protection exists for a practical reason. Banks process thousands of account transactions. Requiring them to investigate ownership disputes before every payout would grind the system to a halt. So the law puts the burden on the parties themselves to resolve beneficial ownership questions separately.

The Written Notice Exception

The protection is not absolute. If a party, personal representative, surviving spouse, heir, or devisee sends a written notice to the bank stating that payments should stop, the bank must honor that notice once it has had a reasonable opportunity to act on it.

Protection under this section does not extend to payments made after a financial institution has received written notice from a party or from the deceased party's personal representative, surviving spouse or heir or devisee if this notice states that payments in accordance with the terms of the account, including one having an agency designation, should not be permitted.

A.R.S. § 14-6226(B)

If a dispute arises and the bank has reason to believe there is a conflict, it can also refuse to make payments without facing liability. This gives the institution a safe harbor while the interested parties sort out the disagreement, often through the courts. For families, the takeaway is clear: account designations carry real weight at the bank, so keeping them accurate and up to date is essential.

A. A payment made pursuant to this article in accordance with the type of account discharges the financial institution from all claims for these amounts, whether or not the payment is consistent with the beneficial ownership of the account as between parties or beneficiaries or their successors. Payment may be made whether or not a party, beneficiary or agent has disabilities, is incapacitated or deceased when payment is requested, received or made. B. Protection under this section does not extend to payments made after a financial institution has received written notice from a party or from the deceased party's personal representative, surviving spouse or heir or devisee if this notice states that payments in accordance with the terms of the account, including one having an agency designation, should not be permitted and the financial institution has had a reasonable opportunity to act on it when the payment is made. Unless the notice is withdrawn by the person giving it, the successor of any deceased party shall concur in a request for payment if the financial institution is to be protected under this section. Unless a financial institution has been served with process in an action or proceeding, no other notice or other information shown to have been available to the financial institution affects its right to protection under this section. C. A financial institution that receives written notice pursuant to this section or otherwise has reason to believe that a dispute exists as to the rights of the parties may refuse, without liability, to make payments in accordance with the terms of the account. D. Protection of a financial institution under this section does not affect the rights of parties in disputes between themselves or their successors concerning the beneficial ownership of sums on deposit in accounts or payments made from accounts.

View on azleg.gov

This page provides general legal information about Arizona statutes and is not legal advice. For guidance on how this law applies to your situation, speak with a qualified attorney.

Related Statutes

§ 14-6101Nonprobate Transfers on Death: What Counts as Nontestamentary in Arizona

§ 14-6102When Nonprobate Transferees Are Liable for Estate Debts in Arizona

§ 14-6103Creditor Claims Against a Trust After the Settlor Dies in Arizona

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