The use of joint accounts is a common way for us to manage our finances, and many of us have a joint account with either our spouse or parents. However, the convenience of joint accounts can easily turn into a nightmare after the death of an account holder.
This article sheds some light on whether the credit balance of a joint account forms part of the deceased’s estate, and if it does, what an executor of the deceased’s estate should do to gain access to the joint account.
Is the credit balance of the joint account part of the deceased’s estate?
After the death of an account holder, the credit balance in the joint account can either vest in the remaining account holder(s), or it can revert to and form part of the estate of the deceased.
In most cases, the survivor(s) of the joint account will be entitled to the credit balance in the account when a joint account holder dies. This is because most Terms and Conditions (“T&C”) governing joint accounts contain a clause that stipulates the automatic transfer of the credit balance in the joint account to the surviving account holder(s) upon the death of an account holder (commonly known as a survivorship clause).
However, if the T&C governing the joint account does not contain a survivorship clause, for example, in cases where the joint account operates with joint signing authority, then the deceased’s estate will be entitled to the credit balance (in the relevant proportion) upon the death of the account holder.
Notwithstanding the above, either the executor of a deceased’s estate or the surviving account holder(s) may bring an action in the courts to dispute on who is truly entitled to the credit balance in the joint account.
If such a dispute arises, the court will have to determine the intentions of the deceased in order to decide who is truly entitled to the credit balance, which is seldom an easy task.
Some factors (not exhaustive) that the court may take into account are set out below in Table 1.
Table 1
| Factors pointing towards the survivor(s) of the joint account being entitled to the credit balance | Factors pointing towards the deceased’s estate being entitled to the credit balance in the joint account |
| T&C governing the joint account contains a survivorship clause. | Money in the joint account comes solely from one account holder (the deceased). |
| Joint account was opened and held between persons in established categories of relationships (e.g. husband and wife, or parent and child), and the deceased is either the husband or parent. | The joint account was opened solely for the convenience of the deceased opening the account rather than as a gift to the other joint account holder(s). |
As illustrated above, it is not always clear who will be entitled to the credit balance in a joint account after the death of an account holder. If an individual seeks certainty, he should keep his monies in a sole account instead.
What should an executor do to gain access to the joint account(s)?
The process of gaining access to a joint account is outlined below (subject to T&C governing the joint account):
In the event the credit balance in a joint account forms part of the deceased’s estate, the first thing an executor of the deceased’s estate should do is to provide notice of the account holder’s death to the relevant bank. Such notice is given by providing the bank with a copy of the death certificate. After receiving notice of the death of an account holder, the bank will be entitled to freeze the account.
Following which, the executor has to make an application for a grant of probate, and once the grant of probate is issued and collected by the executor, he will have to produce the grant of probate to the satisfaction of the bank to gain access to the joint account.