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Types of Account Ownership

At F&M Bank, we seek to help you understand the different types of account ownership available to you. Ultimately, it is your sole responsibility to determine the full legal effect of maintaining the type of account ownership you choose. Please read below for the definitions of each account ownership option.


An individual account is an account owned by only one person.  With the account owner dies, the ownership of the funds passes, subject to applicable law, to the account owner’s estate.  If the account, however, is designated as Payable on Death (POD), the funds will be distributed to the account’s beneficiaries.


A joint account is owned by two or more individuals. The following applies to joint accounts:

  • RIGHTS OF SURVIVORSHIP: When one owner dies, all funds in the account will pass to the surviving owners. When there is only one surviving account owner, the account will be considered an individual account, with funds passing to the estate of the last deceased owner unless the account is designated as Payable on Death (POD).
  • ACCOUNT CONTROL: Any owner may transact business on the account without restriction by or notice to other owners. Any owner may withdraw or transfer funds, close the account, or request stop payments, for example.  F&M Bank is not required to notify any owner of another owner’s activity on the account, but all owners are entitled to information on that account activity.
  • ACCOUNT LIABILITY: If the account is overdrawn, garnished, or otherwise compromised, all owners,  regardless of who initiates or benefits from any transaction, are equally and legally responsible for account activity.
  • CHANGES IN OWNERSHIP: To keep a clear and succinct line of ownership, the removal of any living owner will require the joint account in question to be closed and reopened with a new account number under the new ownership designation.  In the event of an owner’s death, however, the surviving owner(s) may keep the same account; we recommend that they  amend the current account to remove the deceased owner’s name by providing a death certificate; the amended account contract will require the signatures of all surviving parties.

TRUST ACCOUNTS:   Trust accounts help direct and distribute your assets in the way you intend, and avoid probate upon your death.  We encourage customers to consult with their attorneys regarding the establishment and maintenance of a Trust if you feel this might be beneficial for you. Since a trust is recognized as a legal entity separate from the individual trustees, any instrument payable to the trust or to individuals designated as trustee or trust representative must be deposited into an account titled to the trust or else negotiated through special endorsement.

CUSTODIAL ACCOUNTS: Accounts held under the Uniform Transfers to Minors Act (UTMA) allow a custodian—usually a parent or legal guardian– to manage funds owned in the name and Tax Identification Number of the minor.  Although the funds belong to the minor, only the custodian has account authority until he/she opts to close the account and transfer the funds directly to the account owner. The Commonwealth of Virginia allows only two custodians per account.

REPRESENTATIVE PAYEE ACCOUNTS: A recipient of Social Security or SSI funds who is unable to handle his or her own finances may have a Representative Payee (Rep Payee) named for them by the Social Security Administration.  The recipient owns the funds but does not have transaction authority on the account; only the Rep Payee may transact business. The designated representative will be responsible for receiving and managing the funds, and is obligated to use those funds for the recipient’s care.  Only Social Security or SSI funds may be received into the account; no other funds may be comingled. Upon the death of a Rep Payee, a new Rep Payee must be designated to act on behalf of the beneficiary.  Upon death of the beneficiary the funds are payable to his or her estate, and the Rep Payee’s authority is no longer valid.  To open a Rep Payee account, we require a copy of the Social Security Administration’s letter and valid government issued ID for the Rep Payee.

ESTATE ACCOUNTS: To establish an estate account, we require the death certificate and court qualification papers naming the executor or administrator for the deceased.  The EIN for the estate can be obtained through the IRS at WWW.IRS.GOV .


  • PAYABLE ON DEATH: Individual or joint account owners may designate beneficiaries for their accounts, with account funds Payable on Death (POD) of the last surviving owner. Any living beneficiary should prepare to provide valid government issued ID and an official copy of the owner’s death certificate.  Funds designated as POD are not included in the owner’s estate.
  • AUTHORIZED SIGNER: An Authorized Signer designated by individual or joint account owners may transact business on behalf of the owner(s) but does not own the account for his or her own personal benefit.  The account owner is ultimately responsible for the authorized signer’s account activity and may remove an authorized signer at the owner’s discretion.  The authorized signer, however, cannot affect any change in ownership of the account.  PLEASE NOTE that the authority granted by the owner(s) ceases with the death of the last owner; no transactions are authorized after the date of the owner’s death.
  • POWER OF ATTORNEY: F&M Bank recommends that anyone acting in the legal capacity of Power of Attorney (POA) or Agent-in-Fact (AIF) be represented as such in the Account Agreement. An agent or agents designated as POA by an individual or by joint account owners may transact business on behalf of the owner(s) but does not own the account for his or her own personal benefit. Any access to or control of the account will be determined by the POA document itself.  Again, the authority granted through the POA ceases with the death of the owner granting that power.

An authorized signer or POA must be identified by full regulatory compliance.