April 2013 Archives

The dangers of joint accounts (3 of 3): who's the owner?

April 25, 2013, by

man in wheelchair with girl.jpgSondra was helping Uncle Rudolph with his finances, so he put quite a bit of his money in an account in both of their names. He made them joint tenants of the account with right of survivorship, meaning that if one of them died, the other would get all the money. The evidence indicated this was what he intended. Rudolph got cancer and started to fail. Sondra was aware that there were other helpers and it seemed there was a risk one of them would write checks for Rudolph or otherwise access his money. So Sondra took $113,900 out of the joint account to protect it.

Then Rudolph died and other niece Edwina became his executor. Edwina sued Sondra for taking Rudolph's money without authorization.

The trial court ruled for Sondra, determining that Rudolph made a gift to Sondra when he established the joint account. So she was justified in withdrawing funds while he was still living. Any remaining balance in the account passed to her upon his death under Revised Code of Washington 30.22.100(3): "Funds belonging to a deceased depositor which remain on deposit in a joint account with right of survivorship belong to the surviving depositors unless there is clear and convincing evidence of a contrary intent at the time the account was created."

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The dangers of joint accounts (2 of 3), and in this case, Durable Powers of Attorney.

April 18, 2013, by

meeting with broker.jpgAlfred and Sarah named their kids, or at least two of them, Don and Dawn. These homophonic siblings ended up opposing each other in Court. After dad died, Dawn got a Durable Power of Attorney to act for Sarah, and put a bunch of mom's money in an account with Edward Jones titled in their two names as joint tenants with right of survivorship. Dawn made some gifts and loans to friends from this fund, but when mom died there was still more than $400,000 in the account. Dawn took it by right of survivorship, and put it in her own account at the same broker.

When mom died, brother Don was Trustee of her Living Trust that served in effect as her Will (see our earlier blogs on Living Trusts). Apparently most of the trust was to go to charity, but despite a lessened self-interest Don went to Court to challenge Dawn's taking the Edward Jones account by survivorship, claiming that as mom's property it should be part of her trust instead.

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The dangers of joint accounts (1 of 3).

April 11, 2013, by

bank teller.jpg
Widow Maria died and left her modest home to handyman Terry and his wife. Her Will also made gifts to two nuns and her church, with the bulk of her roughly $700,000 estate going to two cousins of her late husband. Rose, one of those cousins, was named as Personal Representative (executor).

There was a question, though, whether Maria's Will controlled her whole estate. She had in her last weeks established a joint bank account with Terry, and put some $234,000 into it. The law is that this joint account, having been set up with right of survivorship (JTWROS), passed automatically to Terry, apart from Maria's Will, unless Rose could show "by clear and convincing evidence" that Maria intended otherwise (Revised Code of Washington 30.22.100).

Instead of taking the funds by survivorship and forcing Rose to sue him, Terry gave the funds to the estate and then sued to get them back, on the same statute creating the presumption in his favor. He won in the trial court, but the estate appealed.

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The investment bet (second year, first quarter).

April 4, 2013, by

bourbon.jpgThe diversified trust portfolio of our friend Lars gained $66,500 during 2012, on its initial investment of $500,000. He is expecting 2013 to be a flat year. The precious metals mix of rich uncle Nils advanced less, to $538,250 but he feels his gold, half his holdings, will be up 15% in the coming year. They meet for dinner at Guy.

Well, not so good for the old man so far. Gold is down almost 5%, and silver nearly 7%. Platinum and especially palladium are up, but the weighted average is minus 2% for the first quarter. Nils suspects he won't be choosing the drink this time.

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