What Happens to Jointly Owned Property or Bank Accounts When One Owner Dies?

Detailed Explanation

Whether a jointly owned home or bank account goes through probate, or simply becomes the survivor's, usually comes down to one distinction most people have never had reason to think about: was it held with a right of survivorship, or in separate shares? See the Wills, Probate & Estates hub for how this fits into the rest of estate administration.

The terms below are the ones used in Australia, England and Wales, the US and other common-law countries. Other legal systems handle co-ownership differently, and that's covered further down.

Joint tenants: automatic survivorship

Joint tenants own the whole property together rather than a particular share of it. When one dies, their interest doesn't pass under their will. It passes automatically to the surviving owner, or owners, under the right of survivorship. Because the interest never becomes part of the deceased's estate, the survivor doesn't normally need a grant of probate to deal with it; a death certificate lodged with the land registry or shown to the bank is usually enough. What probate is and when it's needed explains where this sits alongside assets that do need probate.

Couples who buy a home together commonly hold it as joint tenants, and most everyday joint bank accounts work on the same survivorship basis under the bank's account terms.

Tenants in common: the share goes through the estate

Tenants in common each own a defined share, often equal but sometimes not (70/30, for example). When one dies, their share doesn't go to the co-owner. It becomes part of their estate and passes under their will, or under the intestacy rules if they didn't leave one, and the executor or administrator deals with it in the usual way, which may involve probate.

This arrangement is more common among business partners, friends or relatives who put in unequal amounts, and blended families where each partner wants their own share to go to their own children.

Where survivorship works differently

Not every country uses joint tenancy, and even within a country the rules can split:

• Scotland has no joint tenancy as such. Whether a home passes to the survivor depends on whether the title contains a "survivorship destination".
• The US adds two forms most other countries don't have: tenancy by the entirety, a survivorship form for married couples available in some states, and community property, the marital property system in nine states.
• Civil-law countries, including much of continental Europe, often have no automatic survivorship between co-owners in the common-law sense. The deceased's share usually passes through their estate, and forced heirship rules may give children a fixed portion whatever the will says.

For property in any of these places, check the local rules rather than relying on the common-law picture above.

How to check which one applies

For land and buildings, the title record is the place to start. It's held by the land registry, or in the US by the county recorder, wherever the property sits. Depending on the system, it either states the ownership type outright or contains an entry that signals it. For a bank account, ask the bank how the account is held and what it needs to release or transfer the balance.

Why this matters for estate planning

A will can't override survivorship. If one owner wants their share of a home to go to someone other than the co-owner, such as children from an earlier relationship, a joint tenancy defeats that wish because the interest passes to the survivor before the will has any say. In most common-law jurisdictions the answer is to sever the joint tenancy and hold the property as tenants in common, so each share can then be left by will. This belongs in the conversation whenever a will is being written or reviewed.

Tax when a jointly owned asset passes on

Tax treatment varies a great deal between countries. Some tax the value of the deceased's share as part of the estate at death (the UK and, for large estates, the US). Others have no death duties but apply capital gains tax when the survivor later sells (Australia). A share passing by survivorship usually still counts for these purposes even though it bypassed the will. The country pages below set out how each system works.

How it works where you are

• Australia: Torrens title registries in each state, capital gains tax on a later sale, and New South Wales' notional estate rules.
• United Kingdom: Form DJP and Land Registry restrictions in England and Wales, survivorship destinations in Scotland, and Inheritance Tax on joint assets.
• United States: joint tenancy, tenancy by the entirety and community property, county recorder affidavits, and federal estate tax rules for joint property.

Things to Consider

• Pensions and retirement savings follow their own rules. Superannuation, workplace pensions and retirement accounts usually pass by nomination or beneficiary designation, not under property law or the will.
• A joint mortgage doesn't disappear. The surviving borrower is usually liable for the full remaining loan. Check for mortgage protection or life insurance and contact the lender early.
• Property abroad follows local law. A holiday home or account in another country is governed by that country's rules on co-ownership and succession, which may not recognise survivorship at all.
• Executors still need to know about joint assets. Assets passing by survivorship sit outside the estate, but the executor typically still lists them, and in some countries they count for tax or can be reached by family provision claims.
• Notify the right organisations. Banks, lenders, land registries and insurers each need to be told. The checklist of who to notify when someone dies covers the order.

Common Mistakes

• Assuming all jointly owned property works the same way. Joint tenancy and tenancy in common lead to very different outcomes, so check the title rather than assuming.
• Believing a will can override a joint tenancy. It can't. The tenancy has to be severed during the owner's lifetime if survivorship isn't the intended outcome.
• Taking a joint bank account's terms for granted. Most operate on survivorship, but some don't, and the rules differ by bank and by jurisdiction.
• Forgetting the mortgage. A survivor who assumes the loan is "sorted" without checking for insurance or speaking to the lender can be caught out by the full repayment obligation.
• Applying one country's rules to property in another. For land and buildings, the rules that generally apply are those of the place where the property is, not where the owner lived.