Joint accounts are accounts, usually with a financial institution, where more than one person has rights to the account. Deciding what those rights are is a problem often faced in contested probate cases.
The courts look at the documents creating the account and the words used to determine the type of account involved. Often, the financial institution will use a pre-printed form that has boxes to check. The card will be filled out correctly but no box will be checked! Or two conflicting boxes will be checked! Since all accounts are presumed to be non-survivorship accounts, the burden of proof is on the person claiming that the account is a survivorship account to prove that it is. If the boxes on the signature card are not checked, too many boxes are checked or as one jury found, checked later by someone not the owner of the account, then the account is not a survivor account. The account would pass through the owner’s will or through his estate.
Joint accounts can cause difficulties. The difficulties related to the type of joint account in question. There are three basic joint accounts:
- convenience accounts – where one or more persons own the account but other, non-owners, are allowed to make withdrawals On the death of the owner, the account passes through his will or through his probate estate and does not pass to the non-owner;
- tenants in common – where two are more persons own the account equally – when one owner dies, his share passes through his will or through his probate estate and does not pass to the other owner; and
- joint accounts – with or without the right of survivorship.
- with right of survivorship means that when one of the joint owners dies, the account belongs to the survivor and does not pass through the deceased’s will or through his probate estate.
- without right of survivorship means that the account is owned by the joint owners and when one dies, his share passes through his will or through his probate estate and does not pass to the other owner.
An example of the difficulty with joint accounts are the following cases:
- One case held that there was no right of survivorship even though the signature card said ” Joint accounts – with survivorship” since the language did not match that required by statute to create a survivorship account;
- Another case held that there was not a survivorship account because no box had been checked;
- Signature card said “Type of customer – joint with survivorship” held not a survivorship account; and,
- “Joint account – payable to either or survivor” was not a survivorship account.
As shown by the cases cited above, accounts with a substantial amount of money in them need to be scrutinized carefully to determine what type of account they are and who, therefore, owns the account.
The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws, have an inheritance dispute, a property dispute or want information about contesting a will, we can help. Please go to our main site www.texasinheritance.com and use the contact form to contact us today. We would love to learn about your case and there is no fee for the initial consultation.
Update
Joint accounts continue to be the focus of lawsuits especially where the original owner of the account is elderly. In a 2017 case, No. 12-17-00062-CV, the appeals court said “In essence, the requirements for the creation of a right of survivorship to a joint account are: 1) a written agreement, 2) signed by the decedent, 3) which specifies that his interest “survives” to the other party.” The court found that part 1 and 2 had been met but part 3 had not been met even thought the account purported to be a joint account. “The only evidence purporting to create a survivorship account is the signature card. On it, in a section labeled “OWNERSHIP OF ACCOUNT — CONSUMER,” the account holder is directed to place his initials next to the account selected. This instruction is followed by a notice that “THE TYPE OF ACCOUNT YOU SELECT MAY DETERMINE HOW PROPERTY PASSES ON YOUR DEATH. YOUR WILL MAY NOT CONTROL THE DISPOSITION OF FUNDS HELD IN SOME OF THE FOLLOWING ACCOUNTS.” Nine options are presented, each with a box next to it to be marked to indicate the choice. The box next to “MULTIPLE-PARTY ACCOUNT WITH RIGHT OF SURVIVORSHIP” is marked with an X, and the initials LDH and LWH are on the blank next to that box. The card is signed by all three account holders.” According to the court, this was insufficient to create a joint account with right of survivorship in Texas.
