Joint account
Encyclopedia
Joint account is a bank account
shared by two or more individuals. Any individual who is a member of the joint account can withdraw from the account and deposit to it. Usually, joint accounts are shared between close relatives or business partners.
Joint accounts are often created in order to avoid probate
. If two individuals open a joint account and one of them dies
, the other person is entitled to the remaining balance and liable for the debt of that account.
Sometimes a temporary joint account is opened by two parties entering into a transaction where one party needs a security for the fulfilment of the transaction and the other party has to pay the sum (deposit), being the security for the other party.
Any payment from the joint account or return of the deposit from the joint account, will only be possible if both parties sign a joint written instruction to the bank. It is not possible that only one of the both parties gives instruction for payments of the joint account.
Because (European) banks are not very interested in opening temporary joint accounts, as they are normally used for one transaction only, there are specialised parties or companies taking care of such accounts as trustees. A good example is "foundation Joint Account Shiptrade". This foundation is holding big deposits and payments for buyers and sellers of ships. A temporary joint account is normally closed after the transaction for which it was opened has been concluded. Temporary joint accounts are used in transactions in which large sums of money are involved as an alternative to letters of credit or escrow accounts.
Bank account
A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
shared by two or more individuals. Any individual who is a member of the joint account can withdraw from the account and deposit to it. Usually, joint accounts are shared between close relatives or business partners.
Joint accounts are often created in order to avoid probate
Probate
Probate is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid will. A probate court decides the validity of a testator's will...
. If two individuals open a joint account and one of them dies
Death
Death is the permanent termination of the biological functions that sustain a living organism. Phenomena which commonly bring about death include old age, predation, malnutrition, disease, and accidents or trauma resulting in terminal injury....
, the other person is entitled to the remaining balance and liable for the debt of that account.
Sometimes a temporary joint account is opened by two parties entering into a transaction where one party needs a security for the fulfilment of the transaction and the other party has to pay the sum (deposit), being the security for the other party.
Any payment from the joint account or return of the deposit from the joint account, will only be possible if both parties sign a joint written instruction to the bank. It is not possible that only one of the both parties gives instruction for payments of the joint account.
Because (European) banks are not very interested in opening temporary joint accounts, as they are normally used for one transaction only, there are specialised parties or companies taking care of such accounts as trustees. A good example is "foundation Joint Account Shiptrade". This foundation is holding big deposits and payments for buyers and sellers of ships. A temporary joint account is normally closed after the transaction for which it was opened has been concluded. Temporary joint accounts are used in transactions in which large sums of money are involved as an alternative to letters of credit or escrow accounts.