Law Review: Joint bank account: Who gets the money?
When an elderly person with a joint bank account dies, do the funds in the account belong to the deceased’s estate or do they go to the additional signer/co owner of the account?
That question, analyzed by the California Court of Appeal in “Estate of Betty Lou O’Connor,” is not uncommon.
In the last years of her mother Betty Lou O’Connor’s life, daughter Kelli Anne Parille visited her on a nearly daily basis, taking care of her day to day needs.
While Betty was alive, she opened a joint bank account with daughter Kelli. They both had signing authority. At the time of Betty’s death the account contained $477,218. Not insignificant.
When Betty died she left everything to her three children, including Kelli, and their heirs.
Query: Were those joint account funds the property of the heirs or were they all Kelli’s because she was a joint owner on the account with her mother?
The purpose of this column is to let everyone understand the law so you make smart decisions about joint bank accounts, which are very common. This could happen to you.
Section 5302 of the Probate Court summarizes the law in our case. 5302 reads in part: “[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving party . . . as against the estate of the decedent unless there is clear and convincing evidence of a different intent.” No writing is required to create this right in the co-owner of the bank account.
ARGUMENTS FOR AND AGAINST
Betty’s heirs argued the money was theirs because Betty did not intend to give her daughter Kelli the bank account on her death, but rather wanted someone to be available to sign in emergencies; i.e., the account was not set up to go to Kelli on Betty’s death but opened as a matter of expediency so Kelli could handle her mother’s business affairs, sometimes paying obligations out of the joint account.
The factual question is: What was Betty’s intent when she set up the account? Of course, that’s hard to say.
In the end the trial court ruling was upheld by the Court of Appeal – in favor of Kelli, co owner of the joint account. The court wrote, there is no “clear and convincing” evidence of a different intent required under Section 5302.
The lesson for anyone setting up a joint bank account is to make it clear who gets the funds on the death of the first co-owner: the other co-owner or the decedent’s heirs. When opening the account make it clear. Otherwise you may be involved in an unfortunate lawsuit with your family.
Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, and Reno. His practice areas include: real estate, development, construction, business, HOA’s, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at email@example.com or http://www.portersimon.com.