Do Joint Accounts Automatically Go to the Survivor?

If you have ever assumed that a joint bank account with a survivorship clause means the surviving party automatically gets all the money as a beneficiary without the need for a Grant of Probate or Letters of Administration, a recent 2025 Malaysian High Court case says otherwise.

CLC successfully acted as solicitors for the Defendants, the Executors named in the Will, in resisting the Plaintiff’s attempts to remove them, in Lim Soon Wah v Lim Hooi Ling & Anor [2025] MLJU 1484; [2025] CLJU 1153. In this case, the Court clarified a crucial point in Malaysian estate law: a survivorship clause does not automatically grant the surviving joint account holder beneficial ownership of the funds.

What Is a Survivorship Clause in a Joint Account?

A survivorship clause is a clause in a bank’s joint account mandate that typically allows the surviving account holder to continue accessing funds after one party dies. However, this case made it clear that such clauses are only binding between the customer and the bank. Survivorship clauses do not determine the legal ownership of the funds as between estate and beneficiary.

Key Legal Findings from Lim Soon Wah v Lim Hooi Ling

1. Joint Account Funds Form Part of the Estate Unless Proven Otherwise

The Court held that the money in joint accounts belonged to the deceased’s estate and the Plaintiff derived his beneficial interest from the deceased’s Will, not pursuant to the survivorship clause. This decision is aligned with the Federal Court’s reasoning in Public Bank v New Ace Digital Print and Latiffah bte Mat Zain [2019] 3 MLJ 421.

It is for this reason that prudent wills draftsmen, when drafting wills, will always include a provision reflecting the testator’s intentions on gifts and distribution of monies in joint accounts.

2. Survivorship Clauses Are Not Proof of Beneficial Ownership

A survivorship clause allows the bank to release the funds to the joint account holder, but does not confer ownership rights under Malaysian inheritance laws. Generally, in a case where the deceased had made a Will and had made specific provisions for the bequests of monies in joint accounts, the surviving joint account holder should wait for the issuance of a Grant of Probate and for distribution to be made according to the Will.

The justification for this is that the deceased’s monies are primarily for the payment of debts. The learned judge held in Lim Soon Wah v Lim Hooi Ling & Anor that prior to the administration of the deceased’s Estate, the full amount of the deceased’s debts has yet to be ascertained and this could only be properly determined after Probate has been obtained.

3. Withdrawals from Joint Accounts before Probate were improper

In Lim Soon Wah v Lim Hooi Ling & anor, the Plaintiff withdrew more than RM4.5 million and AUD500,000.00 from joint accounts he held with the deceased before Probate was granted with some withdrawals made even while the deceased was on her death bed. The Plaintiff had conceded that the monies in the joint accounts belonged to the deceased but justified his withdrawals as being his entitlement because of the survivorship clauses for the joint accounts. A crucial fact in this case is that the Plaintiff had failed to produce evidence of a single survivorship clause he sought to rely on.

In light of these facts, the Court held that these withdrawals were improper and the Plaintiff had to return the monies he withdrew to the Estate because the Plaintiff’s beneficial interests in the monies in the joint accounts is derived from the deceased’s Will. Accordingly, the Court held that the Plaintiff’s entitlement to the monies in the joint accounts with the deceased does not take effect until the Will is propounded. The Will is deemed to be valid by the issuance of a grant of probate. As such, the Court held that the Plaintiff was not entitled to treat the deceased’s monies in the joint accounts as his own, until after the Will has been propounded and the said monies are distributed to him pursuant to the Will.

Why This Case Matters

This judgment is important for lawyers advising executors and beneficiaries in Malaysia. It confirms that:

1. Joint accounts do not bypass estate distribution laws.
2. Beneficiaries, if named as beneficiaries of joint accounts in the Will, cannot assume ownership of such monies before the full administration of the deceased’s Estate and such monies may be subject to questions of who truly inherits the beneficial interest.

There was no appeal against the High Court’s decision. The High Court’s Grounds of Judgment is accessible here.