Wondering what happens to a joint following the death of one of the co-holders? We explain everything to you.
It is common to want to open a joint account with the person who shares his life. This makes it possible to pool income and better manage day-to-day expenses. But in the event of the death of one of the co-holders, what happens to a joint account? Where is the money going? Discover all the answers to your questions. But first, we tell you everything about the principle and operation of the joint account and the precautions to take before opening one. Also follow our advice for closing a joint account in the event of separation.
How a joint account works
First, you should know that a joint account is a bank account whose principle is to operate in the name of several holders. The holders are generally married couples, PACS or cohabiting. However, it may be members of the same family (parent/child, brother/sister, etc.).
The first intention in opening a joint account is to more easily share income and current expenses (rent, children’s schooling, insurance, etc.).
Next, note that several types of bank accounts can be opened in an attached form:
- current account ;
- bank savings account;
- accounts titles ;
- term account.
On the other hand, regulated savings accounts (housing savings account, housing savings plan, livret A, etc.) as well as stock savings plans cannot be joint accounts.
On the other hand, the joint account may include the words “Sir/Madam or Sir/Madam” or “Sir/Madam and Sir/Madam”. In the first case, holders can operate their account under their sole signature. And in the second case, each of the operations carried out requires the signature of the co-holders.
Finally, be aware that a joint account is generally opened in the name of two people. However, it is possible to open a joint account on behalf of a group. Indeed, there is no limit number, except if the bank decides to set a ceiling.
The procedure for opening a joint account
The process for opening a joint account is not very complicated. Indeed, it is the same procedure as when opening an individual current account.
However, all holders of the joint account must be present during the operation. They will bring the required supporting documents, namely an identity document and proof of address.
When opening the joint account, the co-holders must sign a current account agreement. And they will also designate a common postal address to receive mail from the bank.
To know : all banks may charge a fee for maintaining a joint account. You will find the rates applied in the establishment’s rate card, on paper or online.
The risks in the event of a banking incident
Before deciding to open a joint account, you should think carefully. Indeed, it is not a trivial operation since it involves consequences in the event of banking incidents.
First, it should be noted that all holders of a joint account have the right to use the means of payment attached to it. Note, however, that all cardholders have their own bank card.
Consequently, each of the holders of the joint account is liable to the bank in the event of an overdraft. In other words, if the joint account is in debt, the financial institution can ask you to repay the debt. He won’t care who made the trade that put the account in the red.
On the other hand, if your co-holder makes bad checks or abuses his bank card to make purchases, you will be filed like him at the Banque de France with a ban on having a checkbook. To protect yourself, you can designate a single person responsible for the banking prohibition when you conclude the contract with the bank.
What happens to a joint account in the event of death?
First, be aware that a joint account can be closed at any time, at the request of one of the holders. Generally, couples decide to put an end to their joint account during a separation (divorce, breakup of Pacs, end of cohabitation). In this case, we speak of dissociation.
Thus, the joint account can be transformed into an individual account in favor of the person who requested the separation in the event of a situation of disagreement between one of the spouses.
But in the event of the death of one of the holders, what happens to a joint account? The situation has similarities with the previous one. Indeed, the surviving co-holder can continue to use his account, without having to take any specific steps with the bank. The joint account is then automatically transformed into an individual current account if there is only one surviving co-holder.
However, the heirs of the deceased co-holder or the notary must not expressly oppose it. Otherwise, the joint account would then be blocked. Note that this is still rare.
What happens to the money in a joint account after a death?
For its part, the bank is responsible for transmitting the list of existing securities, sums and values to the Tax Services Department. It has a period of 15 days from the notification of the death to do so. Note that the amounts and values retained are those appearing on the account on the day of death.
The sums remaining on the account are then divided between the heirs except in the case of a will or a defined matrimonial regime.
If the balance of the joint account turns out to be positive, half of it belongs in principle to each holder. And the half belonging to the deceased holder becomes part of the estate.
On the other hand, if the balance of the joint account turns out to be negative, it is then up to the surviving holders to pay all the sums due to the bank.
Please note, if the surviving co-holder has spent sums in the meantime that were not theirs, they will have to repay them to the heirs.
To know : the personal bank card of the deceased, attached to the joint account, can no longer be used. The surviving co-holder will only use the one established in his personal name.