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Joint accounts: Is that my money or yours?

Joint accounts: Is that my money or yours?

Source: Straits Times
Article Date: 07 Feb 2021
Author: Tan Ooi Boon

Typically, the court recognises that in a case involving two joint holders, the one who contributes the most money, if not all of it, is deemed the owner of the funds.

Many people would not think twice about opening a joint bank account with their spouses, children or even siblings.

After all, having one more signatory can be convenient as one individual does not have to be the sole person to take care of the accounts, especially if the money is to be used for common expenses.

So in good times, joint accounts are a benefit. It is a different story when things turn sour or there is a death in the family.

The million-dollar question is always the same - who owns the money in the joint account?

You will not believe how many families have fought over this, so much so that a major law firm here, WongPartnership, recently put up a "special update" to educate clients on this matter.

Ms Sim Bock Eng, head of its specialist and private client disputes practice, said that just like joint property ownership, it is common for people to assume that if one of two joint account holders dies, the survivor will own the account.

Indeed, many banks have terms and conditions that state that in the event of a death, they have the right to make payment of the remaining cash to the surviving account holder.

"While this is often the case, there are many circumstances which could complicate the position of the surviving joint account holder," Ms Sim added, noting that the courts have made findings on some of these cases.

THE ONE WHO PAYS MOST

Typically, the court recognises that in a case involving two joint holders, the one who contributes the most money, if not all of it, is deemed the owner of the funds.

Take the case of a man who opens a joint account with his jobless son and then deposits money regularly so that the son can use it for his expenses.

If the man dies suddenly and there is a lot of money in the account, his family can argue that all the funds belonged to the man and not the son, so they will be distributed as part of his assets, according to his will. If there is no will, all the assets would be split equally among his children, if he has more than one child and his wife had died earlier.

BLOOD TIES AND RELATIONSHIP COUNT

Does that mean that the person who never contributes to joint accounts always loses?

Not necessarily, because in ensuring fairness and just results for all, judges often look into all evidence and circumstances of the case to see what the intent of the owners of such accounts was.

In cases of joint accounts involving spouses and parents with their children, there is an automatic "presumption of advancement", that the main account holder has intended for the money to be given to the other party in the event of death.

Having such a presumption in law on your side is a good thing because it means that you will benefit from it unless the disputing party can show compelling evidence to prove otherwise.

So in the case of the jobless son, the law works in his favour because it presumes that his father has intended to give him the money to help him out.

But he can still lose the case if his siblings come forward with evidence, for example, that he blackmailed their father into opening the joint account by threatening to cause trouble to the whole family.

That said, the legal ties between husbands and wives are not easily challenged in court.

Two years ago, the relatives of a childless elderly couple went to court over their joint account after both died.

The wife died two years after the death of her husband.

As the man was the sole breadwinner, the issue was whether the money should go to his side of the family or the wife's, as she was the surviving account holder.

The court ruled in favour of the wife's relatives, as the presumption that the man opened the joint account to take care of her was not rebutted.

NON-LEGAL RELATIONSHIP DOES NOT COUNT

Boyfriends and girlfriends may mean a lot to each other, but that counts for nothing under the law.

If you have a joint account with a companion, know that there is a chance you may not get to own anything in the account, even if both of you have lived together for a long time.

The law tends to favour families in such instances, so if a man had a joint account with his mistress, his wife and children can file claims on the money in the account when he dies.

There are, however, exceptions because, ultimately, the outcome will still depend on the intention of the owners since everyone is entitled to deal with his own wealth.

Some years ago, the nephew of a woman sued his aunt's long-time live-in boyfriend for the cash in their joint account that was primarily deposited by her.

The nephew, her sole beneficiary, argued that as the couple never married, the money would not automatically go to the boyfriend. But the lawsuit was dismissed.

The judge found that there was compelling evidence to show that the aunt had intended to give the money to her boyfriend based on their close relationship, the circumstances around why the account was opened and even the manner in which the bank application forms were signed.

WHAT CAN YOU DO?

If there is a lesson that can be learnt from all these cases is that everyone should take more interest in planning and sorting out his personal affairs.

It is quite a contradiction that most people go to great lengths to do well in their careers because this usually means they will end up with more money.

But when it comes to managing the fruits of their labour, procrastination and inactivity seem to be the order of the day.

This increases the risk for your loved ones because the wolves who are after your money may just show up the moment you are no longer around.

Ms Sim says many of these disputes can easily be avoided if people make clear declarations in their wills, for example, on how their assets should be managed.

So, for joint accounts, the following steps can be taken to safeguard their interests.

1. If you have a joint account with someone you do not have a legal relationship with, you can make it clear in your will that you intend to give the money to this person, if this is your wish.

Such a declaration is necessary; otherwise, the other person will have a tough time keeping the money, should there be a contest from your relatives.

2. On the flip side, if you open a joint account with a close relative out of convenience and you want other relatives to benefit from your money, you should similarly state so clearly in your will. Otherwise, the surviving account holder who is a close relative will usually own all the money in a joint account. Despite what some people may think, the law for many complex cases is actually quite clear. As in all things, it is the people who end up muddling their affairs.

So, if you are the one who calls the shots in your family, the buck should stop with you, especially when you state clearly whom should receive it.

Charity is best done while one is alive

It is common for many people to donate money or assets to charity when they make a will, but these acts of generosity may not be so straightforward.

When it comes to giving, there is no doubt that many ordinary Singaporeans are very generous. Whenever the media reports on the plight of poor families, scores of people often call or e-mail to find out how they can contribute.

In a donation drive, hundreds of thousands of dollars can be raised in a matter of days.

There is a reason for this - people will not hesitate to give if they know that their money will go directly to deserving people.

If there is anything that will deter them, it is usually the worry that the money will not be used solely for the beneficiaries but also for other purposes, such as paying for the charity's building fund and other operational expenses.

This is especially so when some donations made in wills prove to be quite substantial.

For instance, many generous people here will buy food items to treat residents of welfare homes and help needy families.

Some of them are able to ensure that their donations go directly to the beneficiaries by getting involved as volunteers.

But if you leave $200,000 in your will because you want this to continue at least 20 times after you are gone, who is going to carry out this wish for you?

If your appointed executor does not share your passion, the money could be paid in a lump sum to a charity - whether it will be spent according to your wishes is anyone's guess.

You can, of course, appoint a professional to do this, but such a service does not come cheap.

Perhaps we can all learn from American industrialist and philanthropist Andrew Carnegie's famous dictum:

•To spend the first third of one's life getting all the education one can.

•To spend the next third making all the money one can.

•To spend the last third giving it all away for worthwhile causes.

The lesson on charity here is that it is best done while you are still alive.

This is easier said than done because if you give too much away, you may end up being short on money if you live a long life.

This is why some still prefer to do so in wills - no one wants to end up as a charity case.

But those who always give will tell you this: It is not the amount but the thought that counts. Once you embrace this, your view will change because the happiness that is the result of your gift will show you that the joy is truly in the giving, not the receiving.

This is why some wealthy people forgo driving expensive cars, as they would rather use the money for worthy causes.

There is truth in this wise saying: What you do for yourself dies with you; what you do for others lives on forever.

It has been more than a century since Carnegie's death. As he had done so much for his fellow men, his name and words continue to live on and inspire people to do good.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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