Understanding Next of Kin in Ghana: Key Insights for Financial Planning

For those who have worked hard to acquire property and other assets, it’s crucial to ensure that someone will inherit these assets in the event of their passing. Beyond physical properties, many people die with money in their bank accounts and various e-commerce apps.

Recently, a trend emerged on social media where people joked about not needing to work hard to make money, claiming they have wealthy relatives whose wealth they will inherit when they die as the “next of kin.” But what exactly is “next of kin”?

Financial institutions often request specific information from customers when opening a bank account. One of the key details required is the identification of a next of kin.

Who is a Next of Kin?

A next of kin is a close relative or person designated by the account holder who can be contacted if the account holder is unreachable or deceased. Typically, banks and investment companies require the name, address, and phone number of the designated next of kin. However, does this mean that the named next of kin automatically inherits the bank account holder’s money and assets?

What the Bank of Ghana Says

The Bank of Ghana has clarified that many people wrongly assume they will automatically inherit money in an account when the account holder dies. This is not the case. In a press release, the Bank of Ghana stated that being named as a next of kin does not automatically grant access to the deceased person’s account or the money within it.

To access the deceased’s account and funds, the account holder must have included the person in their will. The central bank also emphasized the importance of selecting a next of kin who is capable of providing relevant information about the account holder if they die.

Even when someone is named as a next of kin during the account opening process, they must still provide legal documents like a death certificate, letters of administration, or probate before they can access the deceased person’s account.

The Bank of Ghana’s Policy on Dormant Accounts

According to the Bank of Ghana’s policy, stipulated under the Specialized Deposit-Taking Institutions Act (Act 930, 2016), banks are required to contact the next of kin if an account has been dormant for more than three years. If the account remains dormant after these three years, any funds within it will be transferred to the Bank of Ghana.

Ghanaian Inheritance Laws and Next of Kin

One of the requirements for being designated as a next of kin, especially in the context of banks, is that the person must be of legal age. The Bank of Ghana has encouraged people to choose next of kin who are legally capable of making decisions or providing relevant information about the account holder.

Prominent lawyer Andrew Nii Adjei Khartey explained to BBC News Pidgin that Ghanaian inheritance laws provide two main ways for a person to benefit from the assets or money of a deceased individual. The first and most obvious way is if the deceased has left a will.

“If someone dies and leaves a will, it means they have clearly outlined instructions on how their property should be distributed,” Khartey explained. “In this case, the deceased would have named executors who ensure that the instructions in the will are respected.”

The executors would apply to the court for a probate order, which gives them the authority to distribute the property or money of the deceased according to the instructions in the will.

What Happens if There is No Will?

If a person dies without leaving a will, certain individuals are entitled to obtain letters of administration — usually following a priority list that includes the spouse, children, parents, or a customary successor of the deceased. “These people can apply to the court for letters of administration,” Khartey said. “In this instance, there are no instructions on how to distribute the property, but it must be done in accordance with PNDC Law 111.”

PNDC Law 111 governs the distribution of the properties of individuals who die without a will. Prior to the 1980s, many widows and children suffered under customary inheritance laws that often denied them the right to inherit the properties of their deceased husbands and fathers. This law, enforced since June 14, 1985, aims to address such issues.

Under this law, five groups are recognized as potential inheritors of the property of a deceased person if there is no will: the surviving spouse, children, parents, extended family, or the Administrator-General (who would handle the properties if the government intervenes).

Implications of Next of Kin Designation

Lawyer Khartey further clarified, “It is not automatic that the person named as next of kin in bank documents will inherit the deceased’s account. The instructions in the deceased’s will determine how the money or account is distributed. The person named in the will may be different from the one named when opening the account.”

“If there is no will, PNDC Law 111 will dictate the distribution of the deceased’s money, property, pension, and other insurance benefits.”

Regarding the Social Security and National Insurance Trust (SSNIT), where contributors are required to name beneficiaries, the designated beneficiaries inherit the SSNIT contributions as if the deceased had written a will. This arrangement is different from the next of kin designation made when opening a bank account.

Francis Xavier Sosu, a lawmaker in the Ghanaian Parliament and a human rights lawyer, has advocated for the Bank of Ghana to simplify the concept of next of kin for account holders, allowing beneficiaries to access funds more swiftly. He suggested that a standard approach be developed for all beneficiaries, involving the Attorney General’s Office and the Bank of Ghana.

During a policy dialogue organized by civil society groups in 2023, Sosu called for the removal of administrative barriers that complicate the process for those who may not be literate. He urged banks to digitize the administrative process surrounding next of kin designation to reduce associated difficulties.

He also advised individuals to understand the implications of filling out bank and pension forms when choosing a next of kin.