This default position can be rebutted in certain circumstances.
1. If there is clear evidence that the account was put into joint names with the intention of making a gift to the surviving co-owner, then the surviving co-owner will be entitled to the funds.
2. If the surviving co-owner is the wife or child of a deceased (male) co-owner, then the “presumption of advancement” will displace the presumption of a resulting trust and the funds will advance to the wife or child, unless there is evidence that this had not been the intention of the deceased.
In summary, if no consideration was paid by the survivor, if there is no evidence of intention to make a gift, and if the surviving co-owner is not the wife or child of the deceased, then the survivor holds the funds on trust for the estate. This means that the funds will be distributed in accordance with the terms of the will of the deceased or, if the deceased has not made a will, in accordance with the laws of intestacy.
Joint accounts in Ireland
Often, this is done “for convenience”, with the intention of enabling the son or daughter to operate the account for the benefit of their parent: to pay, for example, various day-to-day expenses on the parent’s behalf.
In such circumstances, the funds remain the property of the parent and, on the death of the parent, form part of the parent’s estate. The surviving joint account holder is said to hold the funds on a “resulting trust” for the estate. In other words, no beneficial ownership passes to the surviving joint account holder at any time.
Sometimes, the parent might wish for the child to take a benefit from the account, either at the time the account is put into joint names or, more often, on the parent’s death. There might, in other words, be an intention on the part of the parent to make a gift to the child.
A parent might also intend for both situations to apply successively. While they are alive, the parent might want the child to operate the account for the parent’s benefit and convenience but intend, at the same time, that the child should succeed to the ownership of the account after the parent’s death.
The Account Mandate
In all cases, whether the new name is to added with the intention of conferring a benefit or merely for conveience, it is extremely important that the older person be afforded the opportunity to receive independent legal advice. This will ensure that they fully understand the effect of putting another name on their account and that they are not subject to any undue influence. Their intentions should be made clear to all parties - including the bank - written down, and acted upon.
The account mandate should be reviewed and signed by all account holders and copies retained.
What is a Resulting Trust?
As a general principle of law, where the legal ownership of a property is transferred from one person to another and the transferee (the person who receives the property) gives no consideration (or payment) for it, then the transferee is presumed to hold the property on a resulting trust for the transferor.
The transferee can rebut this presumption by providing evidence of the transferor’s intention to make a gift.
Alternatively, and to similar effect, the presumption of advancement might apply. Whether it does or not will depend on the relationship of the people involved.
What is the Presumption of Advancement?
In a situation where funds are placed by one person into a joint account with another, the doctrine operates to presume that the parties hold the beneficial interest jointly and, ultimately, for the benefit of the survivor.
The presumption of advancement, like the presumption of a resulting trust, can be rebutted by contrary evidence. In other words, if there is evidence that an advancement or gift was not intended, this evidence will override the presumption of advancement and the default position, that of the resulting trust, will apply.