Joint Account Holders – There are two or more people who may decide to open an account to be jointly operated by them. People who have a common interest for which they would like to save may open such account either for the purpose of starting a business or other reasons.
But joints accounts holders are mainly operated by husbands and wife. Another group of people who operate joint account are trustees who open accounts for money held in trust for beneficiaries and executors of wills.
To open a joint account, all the information required from the individuals wishing to open the account. This information is provided using a standard mandate form issued by the bank. A mandate is a document signed by account holders stating rules that should guide the operations of an account
Other Instructions Of A Mandate
Other instructions to the customer can be called a mandate. In addition to the document may be required in which the account holders will state the agreed rules on how to operate the account. The mandate which must be signed by all the parties involve will state, for instance, how many persons must sign when operating the account. If there are two persons or three, they have to state whether “anyone” or “any two” or all are required to sign.
It should be noted that operators of joint accounts are both jointly and severally responsible for the legal actions of any party to the account. Thus, if one is authorized to sign, if he signs a cheque or negotiate a loan, all the parties are liable both as a group and I their individual capacity.
What joint and several responsible implies is that if the money in their joint account is enough to settle their debt and liabilities, each person is also liable to pay from his own personal money.
The common problem that often arises in the running of joint account is how to handle the account when there is a disagreement among the parties. This is more common in the cases of husband and wife. Legally, the bank has nothing to loose provided it follows the stipulated mandate.
Challenges Of Joint Account Holders
However, when bank officials notice such misunderstanding, it is safer for the bank to disobey their mandate and call for a fresh mandate or insist all must sign.
Another problem with the joint accounts holders arises from the death, mental incapacity, or bankruptcy of one of the parties joint account. In the case of death, the bank may relay on the common law principle of survivor-ship and allow the surviving party to continue to operate the account, especially if he account is in credit but where the account is overdrawn, it is rather safe to stop the account.
The rue of survivor-ship in respect of a credit balance owed jointly, it is left for the bank to obtain a survivor by making up a deal with the instruction s incorporated in the signed mandate addressing the survivors if the there is a death of one of the parties. The account should also be stopped in the case of mental incapacity and bankruptcy of one of the parties.
Minor Account Holders
Minors are those that are not yet up to eighteen years old. Legally, they have no capacity to enter into contractual relationships except for necessities. A minor can still operate a bank account provided he account remains in credit.
A minor can also be a party to a joint account making he to also be one of the joint account holders, but he may not be held liable for any loan taken on the joint account. The major thing to note is that the minor do not have the legal capacity to borrow.
Any bank that lends to a minor runs the risk of losing the money. A bank must therefore be careful to indicate on its records that the operator of the an account is a minor. It is necessary when opening accounts for students (student bank account) to find out their age because some of them are still minors. A part from these particular considerations, the accounts of a minor is operated in the same manner as the other sole accounts.
Simply go through the information provided in order to understand the relationships and the differences among these bank accounts.