In our society, as people age, daily activities can become more difficult. In some
families, children or other trustworthy persons are asked to assist. Responsibility for
the payment of bills and expenses may be handed over to those persons. In addition,
some people add those assisting persons to their bank accounts, to facilitate the
payment of expenses and, perhaps, to also manage the funds in the account(s).
Powers of Attorney (POA) are also used to facilitate themanagement of bank accounts.
It is certainly common to take both steps; appointing a person as Attorney and adding
them as an account holder.
The question arises, however, what authority such a person, added to the bank
account, actually holds. Our law appears to be that the level of authority a person has,
depends what steps were taken when they were actually added to the bank account.
If there is no indication in writing what authority the senior person intended to give
the “new” account holder, the added person holds the funds in the account in Trust
for the senior person and, if the senior person dies, the funds belong to their Estate.
If, however, the senior person signs a Deed of Gift, Declaration of intention or similar
kind of document, that document will reveal the extent of authority given and the
treatment of the funds on death.
There are several cases over the years, which clarify the issue. Last year, reasons for
judgment were released in a case known as Re Campbell Estate. Earlier this month,
further reasons were released, with respect to one of the bank accounts, as well as the
entitlement to costs.
The deceased couple were married over 65 years. They had 3 children. Of the three,
the two sons lived out of the town in which their parents lived but maintained regular
contact.The third child, a daughter, remained in the town and had a close relationship
with her parents.
The Husband died in 2014 and the survivingWife died in 2017.
Wills were made in 2010 by the couple. In 2016, the Wife added one son to
3 of her bank accounts. On the day of her death, that son withdrew most of the funds
from one of the accounts.
The Wife added her other son to another one of her bank accounts. Under the Will,
the daughter was the named Executrix and she arranged to freeze that particular bank
account, to avoid a withdrawal from that account by her brother.
The daughter, as Executor, launched action, claiming various remedies, including the
return of the funds (to the Estate) withdrawn from the Bank account, and the release
by the Bank of the frozen funds, to the Estate.
The Court had to decide whether the Wife had, in adding her sons to the bank
accounts, intended a gift to her sons or whether she had only intended that they have
access to the accounts for more limited purposes.
TheWill described the transfer, outside the Estate, of various properties owned by the
deceased couple.They were all passed to various members of the family through joint
tenancy title arrangements, where title passed via the Right of Survivorship (a legal
term), outside the Estate.
The Lawyer who drafted the Will was not instructed as to the bank accounts. Under
theWill, the residue of the Estate was left to the three children in equal shares.
After her husband died, the surviving Wife needed a greater level of assistance
with daily life, including purchasing groceries, as well as transportation to medical
appointments.The daughter had to visit herMothermore frequently, as she seemed to
be losing her cognitive function.
The daughter had been assisting her Mother financially, by paying bills and other
expenses. She was a joint holder on 2 of her Mother’s Bank accounts.
Her Mother was, by 2015, making large withdrawals of money, which was out
of character. The 3 children together sought to arrange their addition to all bank
accounts, in order to better protect their Mother.
In September, 2016 the two sons were added to the accounts but the daughter was not
involved or in attendance at the meetings with Bank staff. She discovered it after the
fact. Over half a million dollars sat in the accounts.
The Court could find no evidence that the deceased Wife intended to gift any of the
bank account funds to her sons. The funds were thus held by the sons in Trust for
In the decision earlier this month, the Estate was awarded costs against the two sons
and funds in the remaining account belong to the Estate.
Inmy view, this case was carefully and properly decided.The deceased was cognitively
impaired when she added her sons to her accounts and there were no documents nor
expressions of any intent to gift her sons any of the money. In general, it is sensible
to add children to a Bank account in order to protect their parent from the potential
exploitation by a subsequent person with whom their surviving parent
may enter a relationship. However, when adding a child to a
Bank account, there is necessity to protect the family as well.
Therefore, some planning (and documents) should accompany
such addition of a child to a valuable bank account, particularly
where there is more than one child in the family.