Who Owns the Balance on the Joint Account?

2nd May 2018 By Arman Khosravi

Sometimes, what seem to be quite simple questions have to be decided in court. In a recent case, the issue was who owned the money in a joint bank account when one of the account holders died.

Simple question or not, it was argued all the way to the Court of Appeal.

The account in point was with the First Caribbean International Bank (Bahamas) Limited and contained some $190,000. It was in the name of the man who died and a friend. The money in the account was almost entirely put there by the deceased man. The question that arose was whether the balance in the account was part of the deceased’s estate or whether it had passed to his friend by survivorship. Other beneficiaries argued that because the man had contributed virtually the whole sum, his friend’s legal interest in it was as a trustee for his estate.

When the account was set up, the men had signed the bank’s standard joint account application form. This contained a clause which specifically said that ‘…all money which is now or may later be credited to the Account…is our joint property with the right of survivorship. That means that if one of us dies, all money in the Account automatically becomes the property of the other account holder(s).’

That may appear to be straightforward, but the legal issues were complex enough for two of the five Court of Appeal judges to dissent from the majority decision that ‘the two holders of a joint account have, by an agreement with the bank to which they were both parties, expressly set out above their signature a declaration as to the beneficial interests in that joint account which…provides for any balance on the account to be the beneficial property of the survivor, upon the death of the other account holder, regardless who contributed the money to the credit of the account before that date’.

Source: Concious

Latest News

Award That Requires Borrowing Made Into Court Order

17th May, 2024 By

Disagreements between separating couples all too often result in litigation that substantially reduces the assets available to them, as was illustrated by a case that recently reached the High Court. At issue was whether awards made by arbitrators in financial remedy proceedings can be made into court orders even if that would require one of the parties to borrow money. The couple had previously had a relationship lasting a few years before resuming their relationship in 2015. They had two children before separating again in 2019. Following their separation, the...

Inheritance Disputes – Costs Risks Can Be Reduced

15th May, 2024 By

Arguments about what someone promised before their death can lead to significant legal costs. However, if faced with a claim against the estate, there may be steps the beneficiaries or executors can take to reduce the risks, as a recent High Court case illustrated. A man had left a farmhouse and agricultural land in Cornwall to his wife, with whom he had also jointly owned a neighbouring area of land. After his death, one of the couple's daughters and her husband claimed that he had told them he wanted them...

Share Rounding Error Does Not Prevent CGT Relief

13th May, 2024 By

There are often very specific rules that must be complied with in order to claim tax reliefs, but if a small mistake arises, the courts may be able to provide assistance. In a recent case, the First-tier Tribunal (FTT) found that an investor was entitled to Entrepreneurs' Relief on the disposal of his shares in a company, despite owning one share fewer than he needed to qualify for it. The investor had agreed to purchase 5 per cent of the shares in the company for £500,000. He wished to own...

Wife Entitled to Maintenance Until Sale of Family Home

10th May, 2024 By

When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale of a former couple's home should be apportioned, the Family Court agreed with the wife that she should receive maintenance payments until the sale took place. The couple had married in 2006. Following a brief separation, they had reconciled for two years before finally separating in 2022. The husband and wife both contended that they should be entitled to about...