Joint Tenancy Account May Be Different In Different States

JUNE 16, 2003 VOLUME 10, NUMBER 50

In January 2002, Family Services, Inc. (FSI), of Barron County Wisconsin was appointed to serve as guardian of the estate of Emma W. (Arizona and some other states use “conservator of the estate” to mean the same thing.) At that time, Emma W. owned her home, had a bank account in her name, and owned a little more than $100,000 worth of certificates of deposit (CDs) in joint tenancy with her sons Paul and Gary. Six months later Emma W. still owned her home but no CDs; Paul and Gary, through their lawyer, let FSI know that they had cashed in the CDs.

FSI sought a court order to recover the proceeds from the CDs, arguing that the appointment of a guardian precluded Paul and Gary from removing their mother’s funds from the accounts. The trial court ruled that as joint owners of the CDs Paul and Gary had full authority to withdraw the funds. The Wisconsin District Court of Appeals has now agreed. In the Matter of the Guardianship of Emma W., May 28, 2003.

The appellate court was unmoved by FSI’s public policy argument that preservation of a ward’s estate is more important than a joint owner’s ability to withdraw funds. The Court relied on the plain language of a Wisconsin statute which provides that “unless there is clear and convincing evidence of a different intent … a joint account belongs, during the lifetime of all parties, to the parties without regard to the proportion of their respective contributions to the sums on deposit and without regard to the signatures required for payment. The application of any sum withdrawn from a joint account by a party thereto shall not be subject to inquiry by any person….”

Arizona has no statute like Wisconsin’s regarding joint bank account ownership. As we have previously noted in Elder Law Issues (see our February 11, 2002, issue–“Creditor Files Claim Against Parent’s Joint Tenancy Account“–as an example), Arizona follows the common-law principle that joint accounts are owned in proportionate to the contribution of those named on the account title.

Having jointly titled accounts can be convenient in the event of incapacity, since the joint owner has easy access to those funds to pay bills. And a joint account avoids probate for the surviving owner.

Remember, however, that joint tenants can expose all account assets to their creditors. Furthermore, the bank may have no idea that your joint tenant actually contributed less than $100 (or nothing) to your joint account, and the bank will likely comply with a request for withdrawal of all funds by any owner. You should be aware of the danger inherent in naming joint owners on any financial account.

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