There are two types of joint ownership in UK; ‘tenants in common’ and ‘beneficial joint tenancy’.

Tenants in common means that each of the parties own, legally and beneficially, a part of the whole and upon death that part vests in the executor of the estate and passes in accordance with the will or intestacy.  This is usually found in the ownership of fixed properties only.

Assets held as beneficial joint tenants must be viewed differently.  This type of ownership is common to joint bank accounts, joint investments and the majority of fixed property ownership in the UK.

The position is this. Those who are named as the joint owners are basically NOMINEES or BARE TRUSTEES for those who are entitled to the beneficial ownership of the asset.  Where an investment is placed in the joint names of spouses and civil partners there is probably an intention that the first dying intended the account to become the absolute property of the survivor upon their death.  Where the ownership is not spousal etc the question has to be asked whether the person who has died intended the survivor to have the beneficial ownership of the account after his/her death.   Thus if an account is held by A and B and they are brothers – did A upon his death intend B to have the whole account? This is further complicated if by his will A bequeaths all the estate to C.

When a death certificate is submitted to the asset holder of the joint account they will remove the deceased’s name, but in reality all that has happened is that the name has been removed from the ‘Nominee/Bare Trustee status’ of the investment.  One has to look elsewhere to see how the beneficial ownership has passed; either by looking at intention or the will or some other evidence which shows the deceased’s thoughts. The position also has to be looked at in terms of the proper law applying to the estate.  This is usually the law of the last domicile of the party dying.

It is suggested that any joint bank account/investment in the names of spouses or civil partners need not be given too much thought if there is no other rebuttal evidence and the will leaves everything to the surviving spouse/civil partner.  In any other situation the position needs to be considered. If in doubt it is suggested that an appropriate clause is included in a will to ensure the situation is clear.

Remember too that the executor has no legal title to any part of a joint account/investment held in terms of a beneficial joint tenancy. If it is decided that the beneficial interest of the deceased does not belong to the surviving joint owner of the account/investment then it may be a question of litigation to recover the funds from the ex joint account to enable the correct beneficial interests to be satisfied.

Tel: 021 674 0390 / 011 656 2722