Death finances
August 6, 2011 10:30 AM   Subscribe

URGENT!!! If two people have their name on a bank account and one of them dies, is it acceptable for the other person to continue writing cheques from that account?

This is in Vancouver, BC Canada. Person who died is the mother of the other account holder.

Absolutely no speculation please. Informed opinions only.
posted by wutangclan to Law & Government (24 answers total) 1 user marked this as a favorite
Did the person put the money in intending for the mother to inherit it? If so it's all her money now. If the person did not intend this, or intended to bestow the money to someone else, then the estate must distribute the funds in the checking account and the bank should freeze it immediately. This is BC law.

Don't sue me!
posted by michaelh at 10:34 AM on August 6, 2011

I have an informed opinion from the US. If you have an account with two people on them and one of them dies it is acceptable for the other person to write checks on it. The account is held in the name of both people.

My father died recently. His ex-wife's name was also on the bank account. This kept it from getting closed upon his death. My lawyer suggested strongly that I take precautions since even though the account was technically his, it would now only belong to his ex-wife [and not even the estate, it was hers alone] who could write checks on it. Call the bank and they will be happy to explain exactly what your legal rights are, they were very helpful to me.
posted by jessamyn at 10:36 AM on August 6, 2011 [1 favorite]

It sounds like you are describing a joint checking account. In the US, a joint checking account only needs one of the two signatures to perform a transaction.

Legal? Most likely, not 100% sure about Canadian banking laws.
Tasteful? Probably not, but if my kid died who I had a joint checking account with, I'd probably want to close it as soon as possible.
Acceptable? I don't know what you mean here.

BG: I worked in banking for years before I got into IT back in the '90s.
posted by Sphinx at 10:37 AM on August 6, 2011

Joint checking account. Deceased is in a care home and care home is askin for bills to be settled immediately, thus the desire of other account holder to write cheques (this person hates owing money).
posted by wutangclan at 10:40 AM on August 6, 2011

From a similar experience with my family, yes, it is perfectly acceptable for the other person named on the account to sign cheques. My family set this up before a relative became sick, to cover this exact scenario.

This is in Ontario.
posted by piper4 at 10:46 AM on August 6, 2011

Wutangclan, it sounds then that the deceased's money was NOT put in in order to give it to the mother, so the bank had best be informed and the money given to the estate to disburse. Again, this is peculiar to BC law -- the checking account does not behave quite like a normal Joint Tenant account in most states in the United States.
posted by michaelh at 10:47 AM on August 6, 2011

Check if the joint account's specifications include "Either/Or Survivor" - that's how my parents have set their accounts up as well as those with us.
posted by infini at 11:06 AM on August 6, 2011

Did the person put the money in intending for the mother to inherit it?

The mother is the one that died. The child is the one who needs to write the checks.

Why don't you call the bank? Surely this can wait until Monday.

From this BC page:

Everything is in joint names. Does the estate need to be probated or administered?

An estate need not be ‘probated' or ‘administered' when all assets (such as bank accounts or real estate) are jointly owned with another person, or when RRSPs, pensions and insurance policies have a named beneficiary. These assets generally do not form part of the estate and will usually transfer directly to the survivor or named beneficiary. Check with a lawyer or the bank, insurance company, and Land Title Office about documentation needed to claim the insurance benefit or register the transfer in title to the surviving joint owner(s).

posted by desjardins at 11:08 AM on August 6, 2011 [1 favorite]

My mistake, but regardless of who died, if all the money in the joint account was the deceased's, and the account was joint for the purpose of getting bills paid, not as an inheritance vehicle, then the surviving joint owner does not have a right to keep spending the money. You need to get the bank to turn the account over to the estate.

This is special behavior about joint bank accounts when the money comes from one person that depends on intent, so normal behavior of jointly owned property upon the death of one owner does not apply here.
posted by michaelh at 11:16 AM on August 6, 2011

michaelh: the bills in question are bills for the home care facility where the deceased lived. If the funds were intended to pay the bills of the deceased, then it doesn't seem like the other joint account holder is "spending the money" for a purpose other the intended purpose ... they are the bills of the deceased, not of the other name on the joint account.
posted by esmerelda_jenkins at 11:28 AM on August 6, 2011

Intent of survivor is to pay bills owed by deceased. Nothing else until after probate.
posted by wutangclan at 11:28 AM on August 6, 2011

[folks can we keep this to what we know and not what we don't know please? thank you.]
posted by jessamyn at 11:51 AM on August 6, 2011

Jessamyn, because there was a question, I need to clarify that based on what we know, even if the survivor is writing checks only to pay the deceased's bills, that account should be turned over to the estate.

That said, if the deceased did not explicitly create the account for her convenience paying bills only (i.e. it was implied and never said or written down) the situation is ambiguous and the bank and the estate have some discretion as to whether to allow the joint owner to continue using the account, and the nature of the checks being written certainly would factor into that.
posted by michaelh at 12:04 PM on August 6, 2011

Call your bank. If you want nothing but informed and authoritative information about your particular bank account, that is the only place you can be certain to get it.
posted by Kololo at 12:06 PM on August 6, 2011 [3 favorites]

I would call bank but it is a Saturday, the deceased has just died literally this morning, and I am wondering if I need to convince the surviving son whether or not he should holding off on paying the bills. The surviving son (old school) hates debts, and paying off his mother's the debts is part of his way of dealing with the grief / shock. I just dont want him to get into unnecessary trouble by doing -- if no laws will be broken then I won't try to stop him at all.
posted by wutangclan at 12:21 PM on August 6, 2011

There is a compromise that might appease him.

He can write all the checks and balance the checkbook. Then put the checks in the desk drawer until Monday after he speaks to the bank about how the account was set up. That way, he feel as though he's done all he can to resolve the debt immediately. He's just waiting for the bank to confirm this is the correct transaction. As soon as the bank confirms, he's free to mail the checks.
posted by 26.2 at 12:27 PM on August 6, 2011 [5 favorites]

Any checks the son writes this weekend aren't going to get processed until sometime on monday, after the banks open. Whether he writes a check now, or writes a check at 9:30 on monday morning after calling the bank, the result will be the same: the check will get processed (at the earliest) sometime on monday.

If writing checks is helping with his grief, and he just needs the act of writing them, then there's no harm in him doing it because they aren't going to get processed till the working week starts, and the checks can be cancelled or he can ask for them back or he can call the home and ask to not have them deposited. (or you can do those things for him).

I would actually be kind of surprised if there are people working in the accounts department of the home on the weekend anyway.
posted by Kololo at 1:06 PM on August 6, 2011

Canadian bank teller here. He's good to use the account. It's his account. As long as the signing authorities aren't set up that both parties have to sign for any transactions, he can sign cheques and send them out. Most joint accounts are "one to sign" meaning that only one party named on the account needs to approve transactions. If he or the mother has the account linked to a debit card or has written cheques and been the only signer, then it's "one to sign" and he can send out cheques. If it's "both to sign" in which case he cannot use the account, but I would be surprised if that as the case.

He'll need to inform the bank soon so that changes can be made to the account to reflect that the mother has died and to settle the estate for any other existing accounts in her name but that money in the joint account is in his name and he can use it however he wants.
posted by GilvearSt at 1:06 PM on August 6, 2011 [3 favorites]

Thanks everyone.
posted by wutangclan at 1:29 PM on August 6, 2011

It seems to me that there are two questions here: 1, whether checks written on the account are legal and will be honored by the bank (almost certainly ok, though it's possible for the account to have been set up otherwise), and 2, whether it's proper for the son to use his access to the account to pay off the mother's debts (which is murkier but michaelh seems to have a handle on it).
posted by hattifattener at 1:32 PM on August 6, 2011

The nursing home is pressing hard because they want to get their money before anyone else gets their hands on the money. Can't blame them, but that doesn't mean you have to pay them immediately.

Depending on the laws and what other creditors there are, the nursing home may not be the first entity in line to get paid. If there are literally no other creditors and no other survivors, I don't see where this would be a problem. But if there are, don't spend the money until you've had a lawyer look everything over.

Intent of survivor is to pay bills owed by deceased. Nothing else until after probate.

I wouldn't do anything until probate, if that is a necessity.
posted by gjc at 4:02 PM on August 6, 2011 [1 favorite]

The nursing home is pressing hard because they want to get their money before anyone else gets their hands on the money...Depending on the laws and what other creditors there are, the nursing home may not be the first entity in line to get paid.

The son should definitely talk to a lawyer before paying any bills. Aside from the general tackiness of the care home pressing relatives on the day of the death to pay their bills immediately, there may be legal issues here.
posted by mediareport at 4:23 PM on August 6, 2011 [1 favorite] issues the care home may be hoping to avoid by cashing the checks quickly.
posted by mediareport at 4:24 PM on August 6, 2011

My understanding is that a joint checking account belongs to the survivor. As such, that money is not subject to claims against the deceased's estate. I second mediareport's suggestion to see a lawyer if you're talking any amount remotely significant. If the estate is large enough to pay all the claims against it, then it may not matter in the long run, but if not, that checking account is probably the wrong place from which to pay bills.

Let it all wash out in probate. Then, if he feels obliged to pay any outstanding debts after the fact, he can make that decision with a clearer mind.
posted by the christopher hundreds at 6:36 PM on August 6, 2011

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