The money in joint accounts belongs to both owners. Either person can withdraw or spend the money at will — even if they weren't the one to deposit the funds. The bank makes no distinction between money deposited by one person or the other, making a joint account useful for handling shared expenses.
All joint bank accounts have two or more owners. Each owner has the full right to withdraw, deposit, and otherwise manage the account's funds. While some banks may label one person as the primary account holder, that doesn't change the fact everyone owns everything—together.
Either party may withdraw all the money from a joint account. The other party may sue in small claims court to get some money back. The amount awarded can vary, depending on issues such as whether joint bills were paid from the account or how much each party contributed to the account.
A joint account is a bank or brokerage account shared by two or more individuals. Joint account holders have equal access to funds but also share equal responsibility for any fees or charges incurred. Transactions conducted through a joint account may require the signature of all parties or just one.
Most joint bank accounts include automatic rights of survivorship, which means that after one account signer dies, the remaining signer (or signers) retain ownership of the money in the account. The surviving primary account owner can continue using the account, and the money in it, without any interruptions.
Ownership of joint accounts and any money within them will generally revert to the other named individuals on the account. For example, if one spouse were to die, the other spouse would still be able to legally access all money in their shared joint account. This money would not be frozen.
If a person is a joint owner of a bank or building society account with the person who has died, then from the time of the death the joint holder automatically owns the money in the account.
As long as the joint owner is not your spouse, the fair market value of the entire joint bank account will be included in the value of your estate. When the joint owner is your spouse, then only half the fair market value is included in the value of your estate.
The Trouble With Joint Bank Accounts
The majority of banks set up joint accounts as “Joint With Rights of Survivorship” (JWROS) by default. This type of account ownership generally states that upon the death of either of the owners, the assets will automatically transfer to the surviving owner.
You'll lose some privacy. All other account holders will be able to see what you're spending money on. If one of the account holders takes money out of the joint account, there aren't many options for getting it back. If the account goes overdrawn, each joint account holder is responsible for the whole amount owed.
A joint bank account generally works like any other checking or savings account. The difference is that two people—married or unmarried partners, parent and child, senior and caregiver—own the account and both have full control over it.
Contacting your bank, credit card and loan providers
Ask your bank to change the way any joint account is set up so that both of you have to agree to any money being withdrawn, or to freeze it.
Either of you can deposit to and withdraw from the account. The problem that can crop up with a joint account is when a relationship ends. Either owner can withdraw the money from the account when they want to without getting permission from the other owner.
Key Takeaways
Primary account holders are legally responsible for the account. Primary account holders can name others as "authorized users" on the account, but they remain responsible for it. Joint account holders share responsibility for that account and both are considered primary account holders.
To close a joint bank account, co-owners need to be present at a bank or have written permission. If you're going through a divorce, separating finances may be more complicated.
The easiest way to tell is to check your statement in online banking under Statements or on the printed copy of your statement. The name listed first is the primary account owner. Joint account owners are listed under each share account as you view down the statement.
When someone dies, any joint brokerage or bank accounts with rights of survivorship can go straight to the joint owner and bypass probate. Most financial institutions just ask you to present the death certificate and fill out the required forms to begin the transfer process.
Generally, the 'principle of survivorship' applies to jointly held bank accounts. This means that in the case of a joint account holder's death, the surviving joint account holder receives the remaining funds, and full control of the account.
The need to do a Will
To sum up, it is wise to do a Will and include your Property even if it is held as Joint Tenants. For your joint bank accounts you should include them in your Will, unless you are certain the bank terms and conditions provide a clear right of survivorship.
Upon the death of one of the joint account owners, the assets are transferred to the surviving account owner. On the other hand, a beneficiary does not have access, control, or ownership over the account while the account owner is alive.
If you own a joint account with another person, the account will usually pass to the surviving account holder outside of the deceased person's estate. This means that if one account holder dies, the other account holder will automatically become the sole owner of the account and the funds will not be subject to IHT.
Joint Account Holders: They have full ownership of the available money in the account. Beneficiaries: If there are no joint account holders, the money is divided equally among all beneficiaries.
It is best to think of the decedent's belongings, paperwork, and assets as “frozen in time” on the date of death. No assets or belongings should be removed from their residence. Their vehicle(s) should not be driven. Nothing should be moved great distances, modified, or taken away.
Yes, it can make your life easier, but there are risks.
But even they may reach a point where they tire of paying bills and tracking their cash flow. Seniors who start to worry about cognitive impairment may want to involve their adult child in helping manage their assets.
How Long Do Banks Take to Release Money After Probate in Australia? Generally speaking, once a financial institution has received the required documentation — including a Grant of Probate or Administration — it will release funds in two to three weeks.