If you hold a bank account jointly with your spouse, civil partner, or another person, you may be concerned about what will happen should one of you pass away. Will you still have access to the account? Do you own all of the funds in the account? What forms part of the deceased’s estate? We understand that this may already be a difficult time for you, so in this article, we set out simply what happens to a joint bank account under Scottish Law when one party has passed away. Please note that different rules apply under the law of England and Wales to joint accounts held there.
Where the account is held by spouses or civil partners
If your joint bank account was held with someone you were married to or in a civil partnership with, and you both contributed to the account, the money in the account is deemed to be held by both of you equally. If one of you has passed away, half of the account's balance on the date of death is presumed to be owned by the deceased. The majority of UK banks will allow the surviving partner to have access to the account, but you must be aware that half of the balance belongs to the deceased's estate.
However, when an account is held jointly, but only one partner contributed funds to the account, the balance of the account would belong to the person who had contributed. In these circumstances, the surviving partner may be required to prove that they paid all of the money into the bank account to have it excluded from the estate of the deceased.
What if the account is held by two people who are not married or in a civil partnership?
In this circumstance, rather than assuming that the account is held in equal shares the executor of the estate must determine how much of the joint account belonged to the deceased. This information is required to value the estate for inheritance tax purposes.
The surviving account holder can still withdraw money from the account if the bank allows them to do so, but there may be problems if the surviving account holder uses the deceased’s share of the funds before the estate has been fully wound up.
What if there are several account holders?
In the circumstances where there are more than two surviving account holders, the bank may ask for a new mandate to authorise future transactions through the account.
What if the account is overdrawn?
The bank will generally stop transactions on a joint account if the balance is overdrawn, and the share of the debit balance belonging to the deceased will become a debt of the estate.
Specialist Executry (Probate) Solicitors, Edinburgh
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