Do I put my accounts into Joint Names?

Should I transfer my Bank Accounts into Joint Names?

In advising on Lifetime Planning, the potential for financial abuse is a major and constant concern. One particular example of financial abuse is the misuse and abuse of Joint Bank Accounts. Older people are often encouraged to add the name of a family member or carer to their Bank Account for the convenience of the older person. This is not as simple as it might seem. There are various potential legal implications on transferring a Bank Account into joint names. These will depend on the intention of the original account holder.

This type of situation is quite common in the case of older people, but is not solely limited to them. It certainly arises when people are particularly vulnerable, for example, when being admitted to hospital or long-term care, or where they are physically infirm and unable to access services directly themselves. They are then encouraged to transfer their Bank Accounts into the joint names of some other person, for their convenience. The arrangement is to facilitate the second account holder operate the account on behalf of the older or vulnerable and infirm person. If that is the situation, the new Joint Account Holder merely becomes an Agent for the older person. The legal interest in the account is effectively transferred into joint names, but simply to facilitate this arrangement. The important point is that there is no intention to transfer any beneficial interest. Therefore the presumption of a resulting trust arises. In such a case, on the death of the original account holder, the monies in the account revert on a resulting trust to his or her Estate. They do not pass by survivorship to the joint account holder.

Legal Nature of an “Agency” Account.

The named Joint Account Holder (Agent) only has authority over the money in the account, to the extent agreed by the Original Account Holder (Principal). If the account is opened for the convenience of the Principal only, any withdrawal from the account should be purely for the care and maintenance of the Principal. If there is a specific agreement between the Joint Account Holders, then the provisions of that agreement will apply. Such an agreement is distinct from the contract entered into with the Bank or Credit Union as to the operation of the account and the rights of the Joint Account Holders against the Bank or Credit Union.

If the Principal becomes mentally incapacitated, the relationship of Agent and Principal automatically ends. The operation of the Joint Account then automatically ceases, and the account falls to be operated either by an Attorney under an Enduring Power of Attorney that has been registered, if there is one, or alternatively, where there is no Enduring Power of Attorney, by the Committee of the Ward if the Principal has been adjudicated a Ward of Court. If there is more than 7,500 euro involved then the Principal must be adjudicated a Ward of Court.

On the death of the Principal, the monies in the Joint Account pass on a resulting trust to the Estate of the principal, they do not pass to the surviving Joint Account Holder who has no beneficial interest in the account.

Transfer of Account into Joint Names by way of gift:

If you wish to transfer an account into joint names by way of gift, there must be clear evidence to indicate such an intention. That intention should be contained in the documentation by which the transfer is effected. If this documentation does not reveal your intention, then there must be clear evidence of or proof of such intention to make such a gift. The onus of rebutting the implication of a resulting trust by way of such evidence, rests on the party claiming to be beneficially entitled by survivorship to the monies remaining in the account. The Joint Account Holder will have to produce evidence of an intention to give them the money in the account by way of gift, otherwise the monies will be deemed to be held by way of resulting trust in favour of the Estate of the deceased Principal. Intention is the key word. There must be clear evidence, preferably in writing of such an intention.

There may be Tax implications of making such a gift and these should be considered carefully. Even in circumstances, where it can be proven or shown that there was an intention to make a gift, the question of undue influence may then arise.

Will you transfer your Accounts into Joint Names?

If you are transferring your Accounts into the Joint Names of yourself and another person, you should clearly confirm your intention to the Bank or Credit Union concerned.

  • This confirmation should be in writing so that the Bank or Credit Union will note it on your records;
    You should clarify whether the Joint Account is for your benefit only with the Joint Account Holder merely acting as your Agent;
  • If you intend that you and the other Joint Account Holder(s) should enjoy the benefit of the monies in the Joint Account, you should state such in writing. This in effect will confer a gift on the Joint Account. You should clarify whether this gift is to have affect at the date of the opening of this Account or on your death;
  • Is the transfer into Joint Names from Husband to Wife or Father to Child? If so, is it the intention to benefit by way of gift the Wife or Child? Without such clarity, the presumption of advancement will apply.

Undue Influence.

If it was clear that there was no gift intended and the monies in the Joint Account revert on a resulting trust to the Estate of the original account owner on that persons death, then there can be no question of undue influence.

Where however, it was proved that a gift was intended, then the further question may arise as to whether the original account owner was induced by undue influence into making such a gift.

The Joint Account Holders do not need to be in any special relationship and the transfer does not have to be of manifest disadvantage to the Principal. Once a presumption of undue influence arises, it is then a matter for the Joint Account Holder to rebut that presumption and to show that the Principal entered into the transaction with the full knowledge of its advantages and disadvantages. This will depend on the question of whether the principal had comprehensive and independent legal advice about all aspects of the transaction.

Alternatively, whether or not undue influence applies, the issue of improbity might arise. If it is established that the transfer of Accounts into Joint Names was improvident, the transaction may be set aside on grounds of its improvidence.

Today’s Lesson:

Do not simply transfer accounts into Joint Names, instead seek out advice from a Solicitor experienced in advising in Lifetime Planning.


Declan O’Toole BCL TEP is a Trust and Estate Practitioner and advises on Lifetime Planning