The dangers of joint accounts (1 of 3).

April 11, 2013, by

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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.

In the Estate of Kirpes, the Washington Court of Appeals reevaluated the evidence. Their approach started on the wrong foot, from Terry's viewpoint at least. It seemed the issue in applying the statute was Maria's intent, a question of fact on which the Court should give deference to the trial court that heard the evidence. Instead the Court declared it was considering a question of law, the ownership of the account, which allowed them to review the matter de novo (anew, without deferring to the trial court). This was a bad sign for Terry.

The Court then proceeded to minimize statutory presumptions (like that favoring Terry here) generally, invoking an old case calling them the "bats of the law, flitting in the twilight but disappearing in the sunshine of actual facts." What little evidence there was here, showed mostly that Maria had instructed the banker to open a joint account with Terry, without clearly specifying it was to have right of survivorship. (It is possible and common to have joint accounts that are not JTWROS). Maria had also transferred funds from her brokerage account to the joint account, without specifically acknowledging they were now going to be JTWROS.

The Court read this little evidence against handyman Terry, and so his suit for the funds failed. He did still get the house, though. Apparently the Court of Appeals thought this was enough. The trial and appeal was a heavy cost for all, of the ambiguity Maria created.