Cohabiting couples 'til death us do part' with the joint account?

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Cohabiting couples 'til death us do part' with the joint account?

In the recent case of Whitlock v Moree [2017] UKPC 44, Mr Lennard and his friend Mr Moree set up a joint account with First Caribbean International Bank. Upon Mr Lennard's death (in February 2010), the money in this account amounted to $190,000 and was contributed entirely by Mr Lennard.

The Privy Council had to decide whether, upon the death of Mr Lennard, the beneficial interest in the account passed to the other account holder, Mr Moree (by survivorship) or whether it formed part of Mr Lennard's estate (by a resulting trust as Mr. Lennard had provided all the money in the account).

When they set up the joint account, Mr Lennard and Mr Moree both signed an account opening document which clearly set out their intentions and stated:

'JOINT TENANCY: Unless otherwise agreed in writing, all money which is now or may later be credited to the Account (including all interest) is our joint property with the right of survivorship. This means that if one of us dies, all money in the Account automatically becomes the property of the other account holder(s)..'

The majority judgment in this case held that there is no reason why money in a bank account should be treated any differently to any other property. The account opening document signed by both Mr Lennard and Mr Moree was an express declaration as to the beneficial ownership of the money in the account and therefore Mr Lennard's beneficial interest in the money passed to Mr Moree by way of survivorship upon his death.

The account opening document clearly set out the beneficial interests of each account holder and therefore questioning the intentions of Mr Moree and Mr Lennard or of who put more money into the account was not considered necessary.

This decision highlights the ever-growing importance of unmarried couples taking steps to manage their financial affairs sensibly and being aware of the legal position in respect of the ownership of property, including bank accounts.

Whether moving in or pooling finances together, couples should decide how they wish to own such property, personal belongings and bank accounts from the outset.

A cohabitation agreement sets out exactly what assets each partner is bringing to the relationship and how they should be divided in the event of relationship breakdown. This can include remaining balances in joint accounts and it can also set out how much one partner has contributed to the mortgage deposit and repayments.

Unless clear intentions of legal ownership are set out in a written agreement, in the unfortunate event of death or relationship breakdown, one partner may find that they have no automatic right to ownership of the property or any remaining balances held in bank accounts.

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