Nitsan Bar-Ilan Law Firm

Joint accounts

A joint bank account is an account in the name of more than one holder. However, whether you open a joint bank account, or join an existing account, this does not mean that ownership of the moneys and assets is divided equally. The terms of the joint tenancy are determined by agreement between the account holders. It sometimes happens that upon the death of one the holders of a joint bank account, the other holders discover that the account is blocked until an inheritance order/probate is obtained. Needless to mention that this situation can cause real distress. Therefore, if you do not know the status of your bank account, you should make inquiries as soon as possible, to avoid unpleasant situations.

In the past, bank used to have account holders sign a ‘surviving form’, instructing the bank, in the event of the death of one of the spouses, to transfer the management of the account to the surviving account holder, so that he or she will be able to continue operating and using  the account. It should be clarified that joint holders who signed a surviving form should make sure that it is still in effect, and even recomend checking with the bank whether the signature must be renewed.

Currently, banks have the joint holders sign a surviving clause, which is part of the agreement of the terms of management for the accounts. The purpose of this clause is to prevent the account from being blocked upon the death of one of the joint holders. However, this gives only permission to execute routine and ongoing activities in the account, up to when an inheritance order/probate is obtained. It should be noted that the joint holders can make the provisions of this clause conditional, and make other arrangements suitable to their needs.

Section 13A(a) of the Banking Ordinance stipulates that “Where a banking corporation receives moneys or securities or other negotiable instruments in a joint account in respect of which it has been stipulated with the banking corporation that upon the death of one of the holders thereof the surviving holder or a person legally acting by his authority shall be entitled to carry out operations in respect of the account, the stipulation shall, for the purposes of relations between the banking corporation and the holders of the account, have effect also after such death”. All this despite the clear language of section 8 of the Succession Law, which stipulates that an agreement on a person’s inheritance and/or a waiver of his inheritance, made during the lifetime of that person are void, unless made by a will, in accordance with the provisions of the Succession Law.

To avoid unnecessary distress, and in order to act responsibly with respect to your spouse and dependents, if you wish to open a joint bank account, or to add your spouse to an existing bank account, we recommend that you seek legal advice and assistance in this matter.

A joint bank account can also be used as a solution for aging parent who needs their children’s assistance in managing their financial affairs. It should be clarified that in case of a parent and a child who are joint account holders, the surviving account holder can also discover upon the death of one of the account holders that the account is blocked until an inheritance order/probate is obtained, and therefore, it is important and recommended to make arrangements with the bank in advance in regard of this issue. Another aspect that should be considered when holding a joint bank account, is the risk of causing discord in the family unit, and jeopardizing the relationship between family members. In extreme cases, this can even go as far as to one of the joint holders being taken advantage of. This joint tenancy has many implications, and should be considered carefully, with open and honest discussion, until the arrangement that best suits your family is determined.