One mistake can land you in trouble when opening a joint account with your husband; choose these clauses carefully...

When a husband and wife open a joint bank account, fixed deposit, or other investment, the bank often recommends choosing an "Either or Survivor" clause. The reason is clear: it simplifies operations. Either partner can withdraw and transfer funds independently, and upon the death of one, the other can easily claim the entire balance. This arrangement sounds very convenient, but this is where the biggest misunderstanding lies.

"Either or Survivor" means that both account holders can manage the account independently while they are alive. If one of them dies, the bank is authorized to disburse the entire amount to the surviving individual. The bank's legal responsibility ends there. But importantly, this provision is only related to banking operations; it does not determine the actual legal ownership of the funds.

What is the actual legal status?
After death, a person's share belongs to their legal heirs. If there is a will, the property will be divided accordingly. If there is no will, inheritance laws, such as the Hindu Succession Act or the Indian Succession Act, will apply.

That is, if the husband deposited his earnings in a joint account and dies, the wife can receive the money from the bank, but the rights of the children, parents, or other legal heirs are not extinguished. They can file a claim in court.

How can the money get stuck?
Suppose the wife withdrew all the money under the 'Either or Survivor' clause. Later, the children or other heirs go to court. The court can issue a stay order, freeze the account, or require the wife to return a portion of the money. In many cases, the survivor must provide a complete explanation of the basis on which the money was withdrawn. This is where family disputes, legal notices, and lengthy litigation can arise.

Difference between a nominee and this clause
Many people believe that the nominee or survivor is the ultimate owner. While the truth is that the nominee is merely a conduit for receiving the funds, the actual ownership rights remain with the legal heirs. Even the 'Either or Survivor' clause does not eliminate the rights of the heirs.

Other Risks
If there is tension in the relationship between spouses, one can withdraw all the money without the other's permission. In the event of a divorce or separation, it can be difficult to prove who owns the money. Large amounts can also pose tax and inheritance complications.

What to do to avoid future disputes?
The safest approach is to have a clear will, which contains clear instructions regarding joint accounts and investment amounts. It is also wise to have separate accounts and proper nominations for large investments. If there is a potential for family property disputes, seek legal advice when opening an account.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.