What Happens to a Joint Bank Account Upon Death?

When a joint bank account holder dies in the UK, what happens next?

Dealing with death is difficult, even more so when it comes to managing finances. If your loved one has a joint account, perhaps with you or someone else, you’re likely wondering what’s going to happen to it. To learn more about what happens to a joint bank account upon death, continue reading.

What is a Joint Bank Account?

A joint bank account is a type of account held in the names of multiple people. In the UK, most banks limit joint accounts to just two individuals, but some allow options for more. Joint holders have equal access to the funds within the bank account and share full responsibility for it.

Who Can Have a Joint Bank Account?

Anyone can have a joint bank account. While it’s common for couples to share a bank account to manage their finances, there’s no specific relationship status required to open a joint account. This means it’s entirely possible to share a joint account with a parent, relative, or even a friend if you wanted to.

What Happens to a Joint Bank Account When Someone Dies?

So, what happens to joint bank accounts when one person dies? Unlike managing individual accounts belonging to the deceased, joint accounts are handled differently. When someone passes away with a joint bank account, all funds in the account automatically go to the remaining joint holder. The remaining account holder must notify the bank of the death, and may have to show a death certificate.

Tax Implications After a Joint Bank Account Holder Dies

When one holder of a joint bank account dies, the money in the account will usually pass automatically to the surviving account holder. However, whether Inheritance Tax is payable is a separate question.

The tax position will depend on the circumstances:

• If the surviving account holder is the deceased’s spouse or civil partner: The deceased’s share of the joint account will generally be covered by the spouse or civil partner exemption, meaning there will usually be no Inheritance Tax to pay on the amount passing to them.
• If the surviving account holder is not a spouse or civil partner: The deceased’s share of the joint account may form part of their estate for Inheritance Tax purposes. Whether any tax is actually payable will depend on the overall value of the estate and any available allowances or exemptions.
• If the account holders contributed different amounts: It should not automatically be assumed that the money is owned 50/50 for Inheritance Tax purposes. The amount belonging to the deceased can depend on how the account was funded and the circumstances surrounding the account.
• If ownership of the money is unclear: Joint accounts can become more complicated where there is uncertainty over who beneficially owned the funds. Professional advice may be needed to establish how the account should be treated as part of the estate.

The important distinction is that money passing automatically to a surviving joint account holder does not, by itself, mean that it is exempt from Inheritance Tax.

Do You Need Probate for a Joint Bank Account After Death?

For most joint bank accounts in the UK, probate is not required. As mentioned, standard joint accounts are set up as joint tenants by default, and all funds go to the remaining account holder without the need for probate. But, if in rare circumstances your joint account is set up as tenants in common, probate may be required to distribute the deceased's remaining funds in line with their Will.

Key Takeaways

• When someone passes away with a joint bank account, all funds in the account automatically go to the remaining joint holder
• For most joint bank accounts in the UK, probate is not required
• Only joint accounts set up as tenants in common face tax implications and require probate

Trusted Advice When You Need it Most

At Bell Lamb & Joynson, we offer expert legal advice when you need it most. Trusted for over 200 years, our firm consists of reliable and dedicated solicitors who are here to support you. We understand how upsetting it is to deal with the death of a loved one, especially when it comes to organising their finances.

We can offer general tax advice and support as you manage someone's accounts after death. Our trusted team can also assist you with probate, taking on any additional legal paperwork and administration you may be having to deal with after a loved one's death.

Contact our friendly team today for guidance after a loved one's passing.