The need for clear thinking about the ownership of bank and other accounts held in joint names was illustrated recently by a case concerning a dispute over an account following the death of one of the joint account holders.

In 1997, Ernest and Mary Cotton, who had three children, Lynn, Russell and Michelle, won £107,000 on the lottery and invested their winnings in two accounts in their joint names with the Coventry Building Society. At about that time, they also made wills leaving their entire estates to each other on the first death and to their three children equally on the second death.

Following Mr Cotton’s death in February 2008, the two accounts passed to his wife who, very shortly afterwards, put them into the joint names of herself and her younger daughter, Michelle.

When Mrs Cotton died only six months later, Lynn, her elder daughter, alleged that her mother’s interest in the accounts passed under her will to all three children, whilst both Michelle and Russell contended that the accounts passed by survivorship to Michelle and that their mother had made a lifetime gift of the accounts to her.

Evidence was produced which showed that Lynn had been estranged from her siblings and that she had had a difficult relationship with her parents. Following a serious row with Lynn in the period after Mr Cotton’s death, Mrs Cotton had made statements to the effect that she wished all the money in the accounts to pass to Michelle in recognition of the care that she had provided for her and to ensure that none of the money passed to Lynn.

The judge found that, although the accounts had originally been put into the joint names of Mrs Cotton and Michelle for convenience only, the legal effect of the statements made by Mrs Cotton was to confer a beneficial interest in the accounts on Michelle so that she became entitled to the entire balance by survivorship on her mother’s death. As the accounts did not pass under Mrs Cotton’s will, neither Lynn nor Russell was entitled to share in the balances.


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