Joint Account After the Death of a Spouse: Can Funds Be Withdrawn and Who Owns Them?

What Happens to the Account in the Absence of a Special Clause

If the joint account holders did not agree in advance to apply a “survivorship” clause—also known as a “longevity clause”—the bank may freeze activity after one of them dies. In that case, it will not be possible to withdraw funds or carry out other transactions, even if part of the balance actually belongs to the surviving spouse. Full activity in the account resumes after obtaining an inheritance order or a probate order. Processing these documents may take time, and the mere presence of funds in the account does not enable the bank to determine in advance who owns them.

What the Survivorship Clause Actually Provides

The clause allows surviving joint account holders to continue managing the account reasonably until the inheritance documents are received. Its purpose is to provide practical continuity, for example, so that the account does not come to a complete standstill during the period in which the estate is being settled. However, the ability to carry out a transaction does not amount to recognition of ownership of the amount withdrawn. In addition, the bank remains obligated to exercise caution, and therefore the existence of the clause does not guarantee approval of every transaction, regardless of its amount.

Why the Balance Does Not Automatically Become the Property of the Survivor

A survivorship clause does not replace a will or override inheritance laws. If the surviving spouse withdraws funds that do not belong to them according to an inheritance order or probate order, they will have to return them. A common mistake is to assume that the right to use the account after the death of the other account holders automatically makes the entire balance the personal property of the survivors. In practice, two questions must be distinguished: whether the bank allows the transaction now, and to whom the amount will be transferred after inheritance rights are determined.

What the Bank Examines

What matters is not only the account’s definition as a joint account, but also the terms of the account-opening agreement. The Bank of Israel requires banks to explain to customers the implications of applying or not applying a survivorship clause. The regulations also distinguish between the signing authorities established by the account holders, because they may indicate the parties’ intentions in the event of one holder’s death. Even when the clause is in effect, the bank acts pursuant to its duty to exercise caution and does not simply carry out every instruction given by the surviving account holders.

What Are the Most Common Mistakes?

The first mistake is relying on memory and assuming that the clause is definitely included, especially if the account was opened a long time ago. The second mistake is withdrawing the entire balance immediately, without distinguishing between the ongoing management of the account and the future distribution of the estate. The third mistake is treating the clause as a substitute for a will, even though the government guide expressly warns against this. The existence and content of the clause can be checked with the bank where the joint account is maintained; if the account holders are alive and the clause does not exist, they can arrange it through the bank.

FAQ

Sources

• Government Guide to Preparing for Death: Joint Bank Account
• Bank of Israel: Joint Accounts and the Survivorship Clause
• Bank of Israel Directive No. 434
• Printable Version of the Government Guide Chapter

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