Joint accounts / death

hebron

If you have a joint current/bank account and other joint savings accounts, can you tell me what happens in the event of death of one of you. Does the surviving person still have access to these account?

Thanks.

zzzLazyDaisy

If a bank account is held in joint names, the money in the account automatically passes to the survivor when one of the account holders dies. It doesn't go through the will or intestacy, it just belongs to the remaining account holder.

Hope this helps

CLAPTON

joint a/cs become the property of the surviving person and so they can continue to use the a/c as normal.
Although such a/cs are outside probate: for IHT purposed however, the HMRC will assume that half the balance is part of the estate and tax may be payable.

JamesU

If you have a joint current/bank account and other joint savings accounts, can you tell me what happens in the event of death of one of you.

Yes, as others have mentioned, the joint account automatically becomes the account of the surviving partner by survivorship, and the bank will authorise this switch when they receive a copy of the death certificate. No need to wait for grant of probate if the account is in joint names, but the grant of probate will be required first by the bank if the account is in the sole name of the deceased, and no access will be allowed until this is given to them. This can lead to delays in accessing funds that may be required urgently at a difficult and emotional time, so planning ahead with this understanding is a good thing. And in this case of an account in sole name, the executor then transfers the account balance to the beneficiaries according to the terms of any will, which is not neccessarily the same as transferrring the balance 100% to the surviving partner. If the surviving partner is the 100% beneficiary, it is passed on to him/her. If the surviving partner is not 100% beneficiary, e.g. in the will it states 50% to the partner and 50% to any children then it is transferred in this way.

Does the surviving person still have access to these account?

Depends on whether or not it is a joint or sole account as described above. I had to help with this recently and the above is how it works.

Concerning other consequences: Yes, Clapton is spot on saying that when you apply for probate, for the HMRC reporting that has to be done at the same time, it is usually considered a 50%:50% split if the account is in joint names for calculating any IHT liability. But the real consequence of this very much depends on the beneficiaries. As above, if 100% is transferred to surviving legal partner, there is no reduction in the deceased person's transferrable IHT threshold, whereas if 50% is willed to children then 25% of the balance of account will lead to a reduction in the transferrable IHT threshold. Therefore there may be instances where this needs to be considered carefully. I cannot remember the specific details any longer, but there may be the possibility of agreed variation on this 50%:50% split in a joint account if, for example, it is shown that the surviving partner's share of the joint account was 90% etc and it could be accounted for as such. In such cases, the transferrable IHT threshold would be reduced less which could be important regarding IHT liability when the surviving partner is deceased. I am not so clear on the flexibility given by HMRC on this final point, and others on this forum with more expertise may be able clarify this point better than myself. If this is the case, it may have important implications on the the % amount of IHT threshold.that can be transferred.

I am not a financial expert but hope the above helps based on my own experience.

hebron

You have all been most helpful.

Thank you.

Hardupguy

Having just lost my wife, we had a joint bank account, which changed from her name only last year due to her illness. Bank have frozen account until they see will and proof of who i am,,,?
They said that due to having a substanial amount in account this is normal...will take approx two weeks to change it to my name only, meantime all direct debits going both ways will be rejected.... Can they do this, i was under the impression that there would be no issues as long as they had evidence such as death Certificate...

mike88

If its a joint account you should have access to your own money. Speak to someone at the bank.

Hardupguy

it was the bank that told me they would need to freeze the account today when i was at branch advising them of my wifes death.

McKneff

Hardupguy wrote: »

it was the bank that told me they would need to freeze the account today when i was at branch advising them of my wifes death.

Speak to someone who knows what they are talking about.:D

Errata

The bank is talking rubbish if it's a joint account. Ring them, ask for the phone number of the bank's Bereavement Centre, speak to it and ask it to give the bank a kick up the backside.

Hardupguy

many thanks for the replies..meeting my lawyer tomorrow so may ask him to intervene...didn't think it was correct procedure when they told me earlier