Joint Bank Accounts and Probate
When someone has a joint bank account the funds within the account are generally considered shared and mutually divisible between the holders of the account as “joint tenants in common”. When someone dies the remaining account holder may submit the death certificate to the bank and take over ownership of the account and all the funds contained within. The funds will be transferred wholly to that individual’s name. The reason for this being that, at any point prior to the death, either party may have used all of the funds within the account at any given time. However, this also means that the account holder is responsible for any and all taxes upon the account in the future.
When the individuals on the account were married, the state has little interest in this transfer during probate, and the accounts are usually exempt from Inheritance Tax. However, where there are unmarried individuals sharing an account, or a child has been placed on the account of an aging parent, greater scrutiny is applied. The general rule is that the deceased will have owed 50% of the tax, and the survivor may be expected to pay that to the estate through using the funds within the account. This is where the executor must work with the parties involved to assess who owns what and who is responsible for the tax.
An executor’s job can be extremely taxing with so many things to take into consideration, which is why it is always recommended that they consult with solicitors, valuation experts, and anyone else who can provide expertise. Probate cannot end until everything is accounted for, which is why it is exceedingly important to understand these matters down to the details so that the judge may close the probate and everyone receive their just portion.