Who is the beneficial owner of the monies

in a bank account held in joint names ?


by Albert Lam


The ownership of funds in a joint account is subject to the same legal principles as other personal property, namely, this is a matter of intention of the joint holders of the bank account.


Ascertaining the ownership of the funds in a joint bank account is no easy task.  There may be many reasons for maintaining a bank account in joint names.  For instance, the joint account might have been opened by the parties to provide convenience to the non-contributing party to use the money in the account for specified purposes.  In which case, such funds remain asset of the party who has provided the funds.  A joint account may also be opened by parties with the intention to pool their respective resources together, in which case the funds belong to the parties jointly.


The situation is further complicated if the joint account holders are members of the family.  Spouse may hold joint account with no specific purpose in mind and they contribute unequal amount to the account.


Furthermore, it is very common that survivorship clause is included in the account opening document.  In general, a survivorship clause operates to transfer the beneficial interest in the asset to the survivor.  The account holders may or may not aware of the existence of the survivorship clause at the time of signing the account opening document.  The survivorship clause of some banks will expressly provide that upon the death of one of the joint account holders, the balance will go to the survivor(s).  Others may simply provide that upon the death of a joint account holder, the bank would transfer the credit balance to the other survivor(s).   It has been held that funds in the joint account belong to the survivor(s) in the former case but not in the latter case. 


It has been argued that these standard clauses are there simply to assist the bank in the administration of the joint account in the event of the death of one of the joint holders.  Arguably, it deals only with the legal title and not the beneficial interest in the funds.  Therefore, such survivorship clause is not conclusive in determining the true intention of the joint holders.  Some even suggest that account opening document is not the sort of agreement that one would expect to be used to make very generous gift to another, in particular, not a related person. 


It is noteworthy that each account holder is free to withdraw funds from the joint account.  Does each withdrawal represent a severance of the joint ownership in the funds withdrawn ?


As mentioned above, the position is far more complicated if the joint account holders are members of the same family.  They may give rise to the presumption of advancement or resulting trust.  Although the presumption of advancement has been abolished in the United Kingdom, the courts in Hong Kong have repeatedly held that it is still applicable due to the difference in socio-economic conditions between the Western and Chinese culture.


In the absence of the common intention or where the evidence for such common intention is not overwhelming, one may turn to the presumption of advancement or resulting trust for assistance.  Bearing in mind that it has been held that the presumption is nothing more than an evidential tool.  The court will give different weight in light of the circumstances of the case.  Whether the presumption is raised depends very much on the circumstances of the case.  One should take into consideration the age and relationship of the parties, any reason or the lack of it for making the gift, the means and financial dependence of the parties, the financial and/or moral obligations towards the others and so on.


If you wish to know more above this subject matter, please feel free to contact our Mr Albert Lam at albertlam@hwg-law.com.



May 2020