Case StudiesAugust 4, 2025by William WongJoint Bank Accounts in Malaysia — Is the Money Automatically Yours? Not Always.

Married couples open them.

Parents open them with their children.

Sometimes even siblings share one.

The thinking is simple:

“It’s easier to manage. Either of us can withdraw. If one person passes away, the other can still use it without hassle.”

Sounds practical, right?

But here’s the big question:

If one joint account holder passes away, does the money automatically go to the other person?

Most people would say: “Of course lah! It’s joint what.”

Well… not always.

It All Comes Down to One Thing — Is There a “Survivorship Clause”?

Many people don’t realise this.

When you open a joint account, the bank forms may (or may not) include a clause called the “Survivorship Clause.”

This clause means:

If one account holder dies, the bank has permission to give the money to the surviving account holder.

Sounds straightforward, right?

Here’s the catch —

When the bank gives you the money, they’re just closing their file.
That doesn’t mean the money legally belongs to you.

What the Law Says: Getting the Money ≠ Owning the Money

Let’s look at what Malaysia’s courts have said.

In the Public Bank v Digital Print Sdn Bhd case, the Federal Court ruled: The bank can release the funds, but that doesn’t mean the survivor is legally entitled to keep them.

And in the Latifah binti Mat Zin case, the Court of Appeal went even further:

“The survivorship clause only gives the right to receive the money — not to own it.”

In short:

Even if the money lands in your account, the deceased’s family (spouse, children, parents) can legally challenge and demand their share — claiming it’s part of the estate.

What If There’s No Survivorship Clause?

Then things are even more clear-cut.

Without that clause, the money must be treated as part of the deceased’s estate.
Which means — it has to be distributed according to the Distribution Act 1958:

• Children: 50%
• Spouse: 25%
• Parents: 25%

So even if you’re the joint account holder, if there’s no will, and no clause — you may end up having to split the money with others.

Joint Accounts Are Convenient — But Also Easily Misunderstood

People often open joint accounts out of trust, practicality, or as a backup plan.
But legally, things may not play out how you expect.

Let’s say:

• A husband and wife share a joint savings account
• Husband passes away
• Wife naturally assumes the money is hers
• But the husband’s children or parents claim it’s part of his estate

Suddenly, a simple bank account turns into a family dispute.
And relationships get damaged.

Is that really what you want?

How to Avoid This Mess? Do These Two Simple Things:

1. Clearly state your intentions in your WillIf you want your joint account to go to a specific person, don’t assume they’ll “know.”

Put it in writing — state exactly who should receive the money and in what proportion.

2. Set up a Testamentary Trust if the money is meant for a specific purposeIf the joint account is for your child’s education, your spouse’s retirement, or your parents’ care —You can set up a trust to manage and distribute the funds for those exact needs.

This way, the money is protected, properly used, and legally secure.

Joint ≠ Ownership. Don’t Leave It to Assumptions.

Just because a name is on the account doesn’t mean the money is legally theirs.
And just because you share it, doesn’t mean it’s simple.

What really matters is:

• Have you planned ahead?
• Have you written it clearly?
• Have you considered using a trust?
• Does your family know what to do?

If you already have a joint account, but no plan in place — now’s a great time to start.

Don’t wait until something happens, and leave your loved ones scrambling to prove what should’ve been clear from the beginning.

For further details, you may make an appointment with our legal advisor here:

https://calendly.com/finex-and-co-legacy-advisory/tea-talk-with-legal-expert