Worthingtons Solicitors

The Dangers of Joint Bank Accounts

It seems like a sensible idea – a cheap and convenient way for a kind-hearted daughter or son to assist an elderly parent with their finances.  It saves on the “unnecessary” cost of an Enduring Power of Attorney, which would enable the future handling of the parent’s financial affairs without a joint account.  However, unintended consequences can arise on the death of the parent, particularly in determining the extent of the deceased’s interest in the account (or the child’s “lack of interest”).  Uncertainty can also arise as to the correct inheritance tax (IHT) treatment of the whole situation.

Sadly, such situations can end up in Court.  One such case was Re Northall (deceased) [2010].  In this case Mrs Northall had purchased her council house with the financial assistance of one of her six sons. The property was later sold, and as the deceased did not have a bank account, another son, Christopher, offered to open a joint account with his mother and the sale proceeds of £54,836.00 were deposited in same. Christopher withdrew £28,625 from the account in the 3 weeks, before his mother passed away. On the day after his mother’s death, he transferred the remaining balance into a joint account held with his wife. Christopher claimed the account had been put into joint names so he could assist his elderly mother manage her finances and make withdrawals. He also alleged that his mother had instructed him to withdraw money for his own benefit and that any residue within the account upon her death would belong solely to him.

A number of general legal principles apply:

  • Joint accounts are ordinarily subject to the standard rule of survivorship – that is to say, upon the death of the first account holder, ownership of all monies in the account passes to the co-owner absolutely. This is common for married couples and can be very convenient, as a Grant of Probate is not usually required before monies can be transferred. It is not so beneficial in a parent and child situation, particularly if the remaining children see the only asset of their parent pass by default to the one child whose name appears upon the account, to the exclusion of siblings.
  • Joint accounts that are deemed to pass by survivorship, pass outside of a will. It would therefore be irrelevant if the deceased did have a will gifting everything between all the children equally. This is why Worthingtons Solicitors will address and review how you legally own and hold your assets, in order to ensure that you can gift them within a will in accordance with your wishes.

Upon the evidence, there was nothing to support Christopher’s allegation that his mother intended the payments withdrawn to be a gift. Indeed, she had intended the monies to remain hers to spend as she so wished. Similarly, there was no evidence to support the son’s allegation that the remaining balance of the account was to pass to him upon death. The son was ordered to return the balance of the account, together with all withdrawals (save those where evidence was available to show the withdrawal was with his mother’s express instruction).


Incidents such as these are all too common, and fortunately can be avoided with good legal advice. It is possible for account holders to sign a declaration of trust stating that the account is held by them as “tenants in common”, rather than “joint tenants” so that on the death of one of the account holders his or her share (as defined in the declaration of trust) passes under the terms of his or her will or intestacy, rather than to the other account holder.  You should also ensure that your Will is reviewed regularly and that you seek professional, legal advice, if you have any concerns.

If you require any advice about the above, or any other legal matter please do not hesitate to call our Partner, Nikki McConnell on 028 9181 1538.

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