prospects of owning a joint bank account with either your spouse, child, relative, neighbor, business partner or a friend cannot be overstated. A joint bank account ownership has been hailed by commentators on the subject as a useful way to manage finances. Indeed the convenience of entrusting given signatories in respect of the bank account has inevitably positioned joint bank account ownership fashionable. However this position may turn awry and problematic on the death of one of the account holders in regard to succession planning.
joint bank account ownership with a right of survivorship implies that upon death of one of the account holders, the surviving account holder becomes the sole beneficial owner of the funds in the joint bank account.
A joint bank account generally allows any of the signatories to operate the account and more often in absence of an express clause stipulating how to deal with funds in the joint bank account upon death of one account holder, most joint bank accounts are automatically subject to the legal principle of survivorship. Accordingly, joint bank account ownership with a right of survivorship implies that upon death of one of the account holders, the surviving account holder becomes the sole beneficial owner of the funds in the joint bank account.
It’s no wonder that beneficiaries and personal representatives of the deceased are usually at pains to find out that the funds in the joint bank account do not form part of the deceased estate hence exempted from the probate and succession process. Essentially, the beneficial ownership of the funds will only be subject to the probate process to the last survivor.
Be sure to review the bank account opening form carefully to ascertain the legal implications thereof. And seek clarification from the bank to secure an arrangement that the signatories’ wishes on dealing with funds upon death of one account holder are properly represented. Isn’t it?
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