The question “Should joint accounts be included in my will?” bothers a lot of professionals these days. And this question will be answered later on as the discussion proceeds further. But before we proceed let’s first take about joint accounts. What ar+e they? And are there rules that govern them?
- Joint accounts are considered non-probate property, and the joint ownership law governs them. And this law is called “Right of Survivorship”. Let’s take for example a joint bank account owned by a married couple, according to the right of survivorship when one of the spouses dies then the whole account will be transferred to the surviving owner. This right will not be dependent on how much contribution one of the spouses has made. Both co-owners of the bank account are seen as a whole.
- Joint accounts are non-probate, which means that they do not have to pass a probate process in order to be inherited by the surviving joint owner.
- A Will has no control over non-probate property, so even if a person writes in his/her Will that he/she intends for one of his/her named beneficiaries to be the owner of the account, it won’t be possible because a joint-account is non-probate. The content of the said account will be passed immediately to the co-owner, e.g the spouse, sibling or whomever the other joint owner is.
- In some situations, the law recognizes a presumption of advancement of gifts effected as a result of the donor transferring assets to certain persons who bear a relationship to him through kinship; e.g. parent and child, husband and wife.
So why bother writing joint accounts in a Will? Here are the three reasons why it should be written in a person’s Will.
- Assurance to Joint Owners – To clearly state to the Executor the full intention of the monies inside the joint account, if intended for the surviving party. This is a way to prevent any dispute or misunderstanding among the estate’s beneficiaries on the rights of the surviving joint owner to the cash inside the account. Disputes will often come out especially from angry family members who would want a portion of the content of the account. Putting it in writing in the Will prevents anyone from laying claim besides the surviving joint owner.
- Protection against common disasters – The common disaster clause in a Will helps provide security for the owner, the spouse, or the joint owner in the advent that they pass away at the same time. Inputs a provision in the Will for joint accounts to pass down to the primary owner’s beneficiary instead of passing down to the secondary owner’s beneficiaries. Take the situation as an example. A mother has a joint account with her daughter, and both ladies pass away at the same time. The mother would have preferred for her assets to be passed down to her other children than to her son-in-law (through her daughter’s estate). However, one should note that in such situation, it will only via a statement of wishes within the Will itself only as the statutory law will still take precedence.
- No Presumption of Advancement– in the cases where one party make a substantial contribution, or there are limited relationship between the two parties or one party retains substantial control of the account. In Low Gim Siah v Low Geok Khim  1 SLR 795, the Court of Appeal rebutted the presumption of advancement. The Court found that the deceased had full and complete dominion over the moneys in the six joint accounts throughout his life and the fact was sufficient to rebut the presumption that the deceased intended for his son to have the moneys in the joint accounts upon his death. It is important to note that estate planning in such manner may result in challenges in courts between beneficiaries and the surviving party. Whenever possible, testator should consider maintaining accounts with substantial amounts in his own name and plan accordingly for these individual accounts within the Will or under a Trust structure.
It’s important to always take into account of the ownerships of their joint accounts when doing estate planning. Even though most joint accounts fall under “right of survivorship”, there are situations where it is important to name and set up provisions for these accounts inside the Will.