Joint Bank Accounts – The Survivor Takes It All?

Joint bank accounts are common and can provide for a useful way in which to manage finances. Accounts held between spouses or civil partners allow for bills and other household expenses to be paid more easily and those held between parents and children allow for the children to assist with the affairs of their parents as they get older.

The convenience of joint accounts can rapidly turn into a financial nightmare, however, on the death of one of the account holders. It can be difficult for the personal representatives of the deceased account holder to know the extent of a deceased's interest in a joint bank account after their death. Questions may arise over what proportion of the account balance should form part of the deceased's estate and what proportion should go to the surviving joint account holder.

This update applies to all those who currently hold, or are thinking about opening, a joint bank account.

The general principle

The general starting point in cases of jointly held bank accounts is that on the death of one of the account holders, the account balance passes in its entirety, by the 'principle of survivorship', to the surviving account holder. The principle of survivorship will override any terms that may be to the contrary in the deceased's Will. This means that the surviving account holder can present the deceased's death certificate to their bank and the bank will likely transfer the account balance into the survivor's sole name, usually even before probate has been granted. In the case of couples, this is often not an issue as it is usually what the deceased would have intended anyway. However, where a child has been added to the joint account, the funds in that account may pass to the surviving child irrespective of the terms of the deceased's Will and thus cause a dispute if, for example, there are other children in the family. This is particularly so if the child has been added to the account after a Will has been made.

Further problems may arise where the contributions made to the account were unequal, with the deceased providing the majority of the funds and a dispute can subsequently arise as to who should receive the account proceeds. In these situations, the court can look at the intentions of the parties when the account was created and at their subsequent behaviour.

The court's involvement

When deciding disputes over the respective interests of holders of joint bank accounts, the court will start with the...