It is very important to mention that there are many controversial issues related to joint accounts.
There are many cases where an old person puts the name of a relative in the joint account to enable that relative to operate the account for the convenience of the old person.
A court case in the UK triggered the need for certain care in such instances.
The deceased was an old businessman with big sum in his bank account.
Before his death, the old man added a relative to his bank account.
After the death, the court had to consider if the funds passed to the relative as the ‘surviving joint owner’ of the account or they formed part of the deceased’s estate to be part of the terms of the will.
When adding the relative to the account, he and the deceased signed the bank standard form which provides for ‘joint tenancy’, unless otherwise agreed in writing, all money which is now or later credited to the account, is our joint property with the right of ‘survivorship’.
This means thay if any one dies, all money in the account automatically becomes the property of the other account holder.
Both parties signed the form although there was a note in the section stating the purpose of the account which indicated that the account was ‘to pay utilities’.
The court decided that, the situation was governed by the wording of the bank mandate and it was unnecessary and impermissible to go beyond that by considering what the actual intentions of the parties may have been.
As a result the party who was added to the account was entitled to all of the money in the account.
In other words, the argument that the money should form part of the deceased’s estate was defeated.
This court decision was criticised as a controversial decision.
If a party is to be added to the account purely for the convenience of the former sole account holder then the intentions must be clearly stated and any bank mandate must be considered carefully to ensure it does not conflict with the intentions of the parties.
Having said this, we would like to highlight that it is very essential to know and understand the terms of joint accounts and to discuss in advance all details with your bank.
Otherwise unpleasant and unavoidable results could happen.