Legal Guide to Senior Citizens' Bank Account

• Owners of an account are usually (and until otherwise proven) co-owners of all rights inherent in the account in equal portions; they are also jointly liable for all obligations in the account. A person holding a power of attorney is not the owner of the account but the owner's agent, acting at the owner's directive.
• Where circumstances of offset exist, it is sometimes possible to offset from the joint account against an owner's personal debt in another account with the same bank. In contrast, it is not allowed to make an offset from a joint account against a debt of a holder of power of attorney as the owner of another account.
• An owner cannot be deleted from a joint account except with his/her consent or under a court order. In contrast, a power of attorney can be canceled at any time.
• When one of the owners dies, the surviving owner may continue to operate the account under the "survivor clause". A banking power of attorney and, accordingly, the ability of its holder to continue operating the account, is automatically nullified when the owner dies or becomes mentally incapacitated.
• Therefore, it is highly recommended to execute in advance a Durable Power of Attorney (also known as an Enduring Power of Attorney) – this is a legal document that enables a trusted person to handle one's financial, medical and personal affairs once that person becomes mentally incapacitated. Due to its special nature, a Durable Power of Attorney continues to be effective even if a person becomes mentally incapacitated.

Option B

Attend to a "survivorship clause" (סעיף אריכות ימים).

The "survivorship clause" or the "long-life clause" is a clause in the opening-of-account agreement stating that after one of the account owners (members) dies, another owner may continue to operate the account. The clause pertains to the relationship between the owners of the account and the bank; it does not transfer ownership of the funds to the surviving owner. Its purpose is to prevent the "freezing" of the account after one of the owners dies and to allow the surviving owner to maintain routine and ongoing activity in the account until an order of inheritance or probate is issued. Were it not for the "survivor clause" - under inheritance law, the bank would have to obtain an order of inheritance or probate before it could allow the surviving owner to do activities in the account.

In the past, banks did not always have a "survivorship clause" in their documents needed to open an account. Therefore, it is important to contact a person's bank in order to verify that the account has a "survivorship clause", and if not - have one added.

Example of a "survivorship clause" that is part of the Bank Leumi opening-of-account agreement:

In the event of the death of any of us, the survivors or their legal representatives shall be entitled to continue to operate the account jointly, including all spheres of activity therein, and the heirs and administrators of the deceased shall have no right whatsoever to operate the account.