Legals of a joint account after separation

zzzLazyDaisy

geordie_ben wrote: »

Just so I understand - can she put the account in dispute and freeze the account without his permission?

In theory, yes. But some banks are more/less cooperative than others.

She may find that she needs a solicitor's letter to the bank. But the best thing is to go and see the bank first and discuss it with someone.

jambosans

zzzLazyDaisy wrote: »

My point was that even if she were to clear the overdraft, she still can't close the account or remove her name without the other account holder's permission, and equally she can't stop him continuing to run up another overdraft for which she would also be jointly and severally liable. Hence the need to freeze the account.

Not necessarily true. Bank accounts (as opposed to savings) are normally opened on an "either to sign" basis, so by extension a sole party can instruct the bank to remove their name or even close the account. It really depends on the wording of the terms & conditions, and the banks "policy" on dealing with name removal/ closures. I know, for example, Bank of Scotland request both parties to sign for closure, but the T&C's clearly state joint accounts are "either to sign" (including closure requests).

ses6jwg

I had a joint account with a flatmate whilst in University with Natwest.

When I went into the branch they told me that I would need both signatures in order to remove myself from the account, but I could close it with just my signature.

We didnt have an overdraft to clear mind you

geordie_ben

jambosans wrote: »

Not necessarily true. Bank accounts (as opposed to savings) are normally opened on an "either to sign" basis, so by extension a sole party can instruct the bank to remove their name or even close the account. It really depends on the wording of the terms & conditions, and the banks "policy" on dealing with name removal/ closures. I know, for example, Bank of Scotland request both parties to sign for closure, but the T&C's clearly state joint accounts are "either to sign" (including closure requests).

Any idea on Lloyds T&Cs for freeze/name removal/closure with a single signature?

jambosans

geordie_ben wrote: »

Any idea on Lloyds T&Cs for freeze/name removal/closure with a single signature?

Lloyds_TSB_Personal_Banking_Terms_&_Conditions wrote:

12.1 Joint customers
If two or more of you are party to this agreement, the following terms apply:
(a) Any of you can give us instructions independently of the others on your joint accounts. This means any one of you can, for example, withdraw all or any money on an account without the knowledge of the others, close an account or end a service, ask for statements to be given electronically alone or by paper too, and apply for overdrafts, cards and other services or different accounts with benefits packages which are covered by this agreement and which are available on your joint accounts. We will not normally make enquiries about the purpose of any payment instruction or other instruction or confirm the instructions with the other joint customers.
[...]
h) If we open an account for you jointly and you later wish to take someone off, add another person to the account or authorise someone else to operate the account, you must all apply to do so.
(i) If we become aware of a dispute between you, we may take steps to prevent any of you giving instructions or using the account individually until the dispute is ended.

So, in summary, a sole party can instruct them to close the account, and place the account in dispute, but oddly both joint parties must agree for a name to be removed.

Link to T&C's below:-
http://www.lloydstsb.com/media/lloydstsb2004/pdfs/personal_banking_terms_and_conditions2.pdf

EarthBoy

jambosans wrote: »

.. but oddly both joint parties must agree for a name to be removed.

It doesn't seem odd to me. It stops one person trying to remove their name and leave the other having to pay the overdraft. It also stops someone trying to remove the other person's name and claim all the money in the account.

supa-girl

I worked for a bank some years ago and we would have the option, as PP's have said, to apply a "matrimonial dispute notice" to the account where a marriage or relationship had broken down. This would basically mean that payments could still be made into the account but both parties would need to agree to any withdrawals. Either party could put the account into dispute, but they would need to ensure that they had already diverted funds to an alternative source and cancelled any direct debits etc. We could do this if an account was overdrawn so long as the customer signed an agreement to pay an agreed monthly amount into the account each month towards clearing the overdraft. As I say, this was a while ago and things may have changed.

My advice would be to speak to the bank AND put your request in qriting as well.

SG

jambosans

EarthBoy wrote: »

It doesn't seem odd to me. It stops one person trying to remove their name and leave the other having to pay the overdraft.

Which is countered by the following conditions:-

Lloyds_TSB_Personal_Banking_Terms_&_Conditions wrote:

12.1 Joint customers
[...]
(d) Each of you is separately responsible for complying with the terms of this agreement. If any one of you does not comply with the terms, we can take action against any or all of you alone or together. For example, we can take action to recover the whole of any joint account debt from any one or more of you, even if you did not know about the debt.

[...]

18.7 When you or we end this agreement, any benefit, service or account we provide under it will end and you must on our request:
(a) repay any money you owe us, such as any overdrafts [...]

I would suggest removing your name constitutes an end in the agreement between the party concerned and the bank.

EarthBoy wrote: »

It also stops someone trying to remove the other person's name and claim all the money in the account.

A red herring of a point, as either joint party can remove money from the joint account to a sole account (and by extension "claim all the money in the account") - so this condition provides little protection to the scenario you've described. Also, there is nothing in the T&C's which state when a sole party requests a joint account closed, the funds are issued jointly, in fact, it states the contrary:-

Lloyds_TSB_Personal_Banking_Terms_&_Conditions wrote:

12.1 Joint customers
[...]
(j)When this agreement ends (or your account is closed) we may pay or transfer money we hold for you under this agreement (or in the account) to any one of you.

I understand the point you are making, but ultimately there are simple "work arounds" to the requirement of both parties to sign for name removal. Hence why I suggested it was "odd".

boo_star

EarthBoy wrote: »

It doesn't seem odd to me. It stops one person trying to remove their name and leave the other having to pay the overdraft. It also stops someone trying to remove the other person's name and claim all the money in the account.

The bank won't allow any party to remove their name from an overdrawn account, even if both parties agree to it.

As far as removing someone elses name from the account, only they can do this, you can't remove the other persons name from the account. If you just wanted to "steal" the cash you can simply withdraw it, there is generally no requirement for both parties to agree to it.

geordie_ben

boo_star wrote: »

The bank won't allow any party to remove their name from an overdrawn account, even if both parties agree to it.

As far as removing someone elses name from the account, only they can do this, you can't remove the other persons name from the account. If you just wanted to "steal" the cash you can simply withdraw it, there is generally no requirement for both parties to agree to it.

My friend wants to remove her name from the account, not his.