Joint Bank Accounts in Will Contest Cases

We have all seen this – Auntie Hilda, a frail, vulnerable and yet compos mentis 86 year old spinster has trouble getting to the bank in her local town, where, on a weekly basis, she withdraws £100 cash for her shopping, newspaper and gin. The same bank account holds all of her worldly savings which includes a large lump sum in life insurance which she received after her sister’s death. The balance in the account is £250,000.

Along comes her niece, Grace, who is actually only a goddaughter, but who is 50 years old and lives in the same town. She is 50 years old and lives in local social housing. She offers to help Hilda, and agrees to be a joint account holder with her.

This arrangement works well. As Auntie Hilda gets older, she starts to struggle to walk, and eventually becomes housebound. However, Grace continues to withdraw her weekly £100.

When Hilda dies, near relatives are disappointed to find that the money in the joint bank account doesn’t form part of Hilda’s estate. They receive only the contents of her home (which is rented) which are valued at £150!

The above scenario isn’t real, but is often repeated up and down the country. What is the position in law?

In Re Northall (deceased) (2010) EWHC 1448 (CH), a similar scenario existed. Mrs Northall had bought her Council House with financial help from her children. When the property was sold in December 2006, she received a cheque for £54,836, but, unfortunately, she didn’t have a bank account. One of her children opened a bank account for her, but in joint names with himself. About 50% of the £54,836 had been paid out by time Mrs Northall passed away. After her death, he actioned the whole of the balance to be paid into a joint account with his wife.

When the matter came to court, the son who had received the money claimed that it was his mother’s intention that he should have the residue from her account (which he had held with her).

The Judge upheld the following legal principles, there was no evidence that the money had been intended as a gift for the son. Basically, when one person puts money into the joint names of another, there is a presumption of something called a “Resulting Trust” in favour of the provider. In other words, the money continues to belong to the provider. However, if it can be proved by the recipient (here the son) that it was the intention of the provider to give it to him, then he can keep it. The burden of proving it was on the son, but he couldn’t. To be clear, then, the Court was not prepared to rely on his own evidence on this point.

Taking a step back, one can see that as a result of this decision, it would be difficult for the recipient of a “windfall” from the joint bank account in these circumstances to prove the intention of the deceased joint account holder.

However, a more recent decision by the Supreme Court in the guise of the “Privy Council” has considerably watered this down – see Whitlock and another v Moree (2017)(UKPC 44). Here, the court looked more closely at the bank’s own terms and conditions governing the operation of the bank account. It found that by these terms and conditions, each joint account holder (and, significantly, the provider of the money into the joint account) had agreed that it was the survivor on the death of one of the joint account holders who was entitled to the remaining balance in the joint account. This was regardless of who had put it there. Further, there was no need for the Court to look beyond these terms and conditions.

It would appear, then, that for the time being at least, the Courts have successfully closed the fruitful line of attack for disappointed beneficiaries in Will dispute cases opened up by the decision in Re Northall.

If you have any concerns or questions about this, or any of these issues apply to you, then please do not hesitate to contact us at Willclaim.com for a confidential no-strings chat.