By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning Attorney

Recently, a client needing estate planning was concerned that the debt of her spouse and if a creditor could go after the couple’s mutual fund, thereby draining the account so neither of them would have the money.  It was a tough situation that required us to look into what a creditor can do with joint assets, and how much of a joint account, if any, a creditor can go after.

To look at this question, let us start with the basic concept of a joint account.  In the absence of evidence of who contributed what to a joint account, joint bank accounts belong “in equal shares to all parties having present right of withdrawal.”  N.J.S.A. 17:16I-4 (a).  In previous blogs, I explained how this law gave a “right of survivorship” to the surviving owners of the account, unless there is evidence to suggest the account was not meant to be a joint account.  This could be because there was an express agreement entered into with an account owner making this account a “tenants in common” account where the proportion of money each puts in is all that you are entitled to.  In another one of my previous blogs, I took you through two different situations where a court determined that a joint account was not created, but rather was simply put into an account for the convenience of the parties in case something happened to that original owner and the surviving account holder needed access to the money.

If your account does not fit any one of the three situations I mentioned above, you have a joint account with right of survivorship.  So what do creditors do? Several reported cases in N.J. tell us that a claim made against one of those accounts severs the joint tenancy and turns the account into a tenants in common account where the proportion of money you put in is all that you are entitled to.  This means that the creditor cannot go after all the assets in the account, since some is yours and some is the other account holders.  So how much can the creditor go after?  Well that depends on how many account holders there are.  The presumption with joint accounts is that every account holder owns an equal share of the account.  So in the case I mentioned above, our client would own 50% and the debtor spouse would own 50% of the mutual fund, and so the creditor can go after 50% of the money in the fund. If there were four account holders, each would own 25%.  And so on.

To discuss your NJ Estate Planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.