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With many of us helping to care for older relatives, a joint
account seems like a simple solution in order to help with weekly
shopping and other tasks. Adding family members to the bank
accounts of their elderly relatives is now a fairly common
occurrence.
However, it's important for those putting their wills into
place to make their intentions clear in relation to jointly held
bank accounts, particularly in cases where family members are added
simply to help out with weekly tasks, and where there might be
other family members with a claim to the estate of the
deceased.
Where bank accounts are held jointly between family members
– such as between a husband and a wife - it is presumed
that, on the death of one of the joint account holders, the
entirety of the account will be inherited by the surviving joint
account owner. This process is known as
'survivorship'. However, this can be challenged,
particularly in cases where family members have been added to an
account to help out an elderly relative with weekly
tasks.
Whilst the presumption of inheritance by survivorship would
still stand in cases like this, if it can be shown that the
individual was merely added to the bank account for purposes of
convenience and that the monies in the joint account were only
input by the elderly relative, the presumption of survivorship may
be challenged and/or invalidated. In those cases, the monies
held in that bank account will be classed as belonging to the
estate of the deceased, rather than the surviving joint account
holder. Those monies would then be divided in the same manner
as the rest of the deceased's estate.
The complications of joint accounts were highlighted in a recent
High Court decision in Drakeford v Cotton and Stain. In this
case, Mrs Stain was added as a joint account holder to the two
building society accounts of her elderly mother, Mrs Cotton.
The accounts contained sums in excess of £50,000 and, upon
the death of Mrs Cotton, the ownership of the account and the
monies contained within the account passed to Mrs Stain. Mrs
Stain's sister, Mrs Drakeford, disputed this position and
brought a claim against Mrs Stain. Mrs Cotton's will
declared that her estate should be split equally between her three
children. Therefore, if Mrs Drakeford were to be successful in
her claim, she would be entitled to inherit a third of the money in
the accounts.
It was eventually agreed by the parties that Mrs Stain had
initially been added to the accounts for the purposes of
convenience. However, it was argued in support of Mrs Stain that
Mrs Cotton had made statements regarding her intentions for the
monies in the joint accounts to pass to Mrs Stain. This followed a
serious falling out between Mrs Drakeford and her family regarding
a phone conversation during which she was allegedly abusive to her
mother. Further evidence was also put forward that Mrs Cotton
intended to alter her will to exclude Mrs Drakeford, however she
had not managed to complete this before her death.
The High Court held that whilst Mrs Stain would not have
initially been entitled to benefit from the joint account by way of
survivorship, there was scope for altering this position where
there was clear evidence that the intentions of the account holders
had changed. Here the court found that, following her falling out
with Mrs Drakeford, Mrs Cotton had a settled intention that the
monies in the accounts should pass to Mrs Stain on her death, to
the exclusion of Mrs Drakeford. Accordingly, Mrs Stain would not be
prevented from inheriting the entirety of the monies from the
accounts, despite the fact that Mrs Cotton had not made clear these
intentions in her will.
Hugh James partner and specialist wills dispute solicitor,
Matthew Evans, commented: "It is certainly not uncommon for
family members to jointly own bank accounts and indeed it can be
both convenient and practical to assist family members in day to
day circumstances.
"However, this case illustrates the importance of avoiding
the potential for conflict, through taking precautionary steps in
executing a will that makes your intentions clear. Unfortunately,
whilst Mrs Stain was successful in retaining her benefit in the
account monies, the fact that the late Mrs Cotton had not taken
such steps meant that her family had to endure further emotional
stress and the significant expense of legal fees."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A legal services order may be worded so as to provide that it will be for a specified period of time or for the purposes of a specified part of the proceedings.
The case of Hawes v Burgess and another [2013] EWCA Civ 74 is recent Court of Appeal decision reminding Probate practitioners of what steps must be taken to ensure that Wills they draft are upheld.
A well-meaning friend, relative or even a carer of a deceased person may take what they believe are helpful steps to tidy up a deceased’s affairs in the days following their death to pave the way for those who will carry out the administration of the estate.
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