Joint Bank Accounts: What Happens If One of The Account Holders Dies?

Most joint account holders assume that upon death of a joint account holder, the surviving joint account holder will be the owner of the monies in the joint account. Is this true?

First, let us explore some of the basic features of a joint bank account.

  1. Transactions for joint accounts can be done by both (or all, if there are more than 2) joint account holders, where it is termed as “both to sign”; or
  2. Transactions for joint accounts can be done by either one of the joint account holders,where it is termed as “either to sign”;
  3. Some banks in Malaysia include as part of the joint account opening mandate termed as“survivorship clause” which means in the event of death of one of the joint account holder,the surviving joint account holder is entitled to the monies in the joint account.
    There are court precedents that have decided that the joint account holder does not own all the monies in the joint account but rather that he holds in trust any portion taken out that is not his;
  4. It should be noted that a “survivorship clause” does not confer legal ownership rights tothe surviving joint account holder other than for his own share because the law here forjointly owned assets is based on tenancy-in-common law and not joint tenancy law. Suchclauses are included by a bank in its terms and conditions for its own protection to free itfrom liability should the surviving joint account holder withdraw monies from the jointaccount when the other joint account holder dies. It is a contractual arrangementbetween the account holders and the bank and not a testamentary disposition thatspecifically gives ownership right upon death to the surviving joint account holder.
  5. Joint bank accounts that do not have the survivorship mandate will be suspended orfrozen upon notice being given to the bank as to the death of a joint account holder evenif the joint account is “either to sign”.

Let us assume there is a joint account in the name of A and B and either one of them can deal with the joint account at any time.

Upon death of A, B, without informing the bank of the death of A, made withdrawals from the joint bank account through the automated teller machine (ATM). Can B do so and would B be able to keep those monies withdrawn after the death of A?

The answer is as follows, whether the joint account has a survivorship mandate or not:

  1. Upon death of A, the monies in the joint account would under the law be owned half by A’sestate and half by B;
  2. In the event B withdraws monies for more than his portion as mentioned above, B would be acting as trustee (for A’s estate) for the amount withdrawn in excess of B’s portion. Therefore, B would be liable to return the excess amount to the estate of A and the failure to do so will give cause for A’s estate to take legal action against B;
  3. In the event B withdrew monies before A’s death when it is an “either to sign” arrangement,there would be no recourse against B because such withdrawal is

So what should A and B do?

It is not recommended that A and B in their wills give their portion of the monies to different persons because this would easily give rise to dispute between the surviving joint account holder and the estate and/or the beneficiaries of the estate. This can happen also when the surviving joint account holder withdraws all or most of the monies in the account shortly after the death of a joint account holder.

A and B should each have a will giving their portion in the joint account to each other. This would avoid contest between the deceased’s estate and the surviving joint account holder. However, before B, who is the surviving joint account holder can receive from A, being the deceased, his portion in the account, it will need to be done through the executor of the deceased’s estate since the portion forms part of the deceased’s estate. Unless otherwise provided for in A’s will, such portion will be used to pay off his debts and only when all debts are paid, can any remaining balance will be given to B as the surviving joint account holder.


Dealing with the passing of a loved one is always going to be hard. As if this unfortunate event is not difficult enough, setting joint finances in order can be another headache and this can be avoided through proper planning.

In addition, you may also advise your clients to set up a UDeclare/UProtect to ensure their family members have access to emergency funds to tide them over until the estate is settled.

Disclaimer: This article is given purely for information drawn from other sources and Rockwills make no representations, express or implied, thereon and shall not be responsible for the accuracy of such information.

Reference: New Ace Digital v PBB, Re Northall [2010], Latifah Mat Zin v Rosmawati Sharibun & Anor etc (