Larkins v. Mendez illustrates how a bank account titled in joint names with right of survivorship (“JTWROS”) between a decedent and his child may NOT be distributed to the surviving child, if the decedent named the joint owner merely for convenience. If established as a JTWROS, then, upon the death of a decedent. the account would be transferred to the child. If the account is a “convenience” account, then the account would be part of the decedent’s estate and governed either by a will or, if no will, under Florida law.
After his wife died, Grover Larkins (the “Decedent”) added his son, Grover, Jr. (“Son”) on an account that he and his wife opened in 1997. His son was the only child that lived locally. Decedent checked the box “multiple party account with right of survivorship” even though there was another box he could have checked for “convenience account”.
After Decedent died, Son closed out the account and spent all of the money. The other children disagreed and argued that the account was an estate asset and under the intestate laws (Decedent died without a will) the proceeds would be split 3 ways between his children.
The probate court held a 4 day bench trial and the Decedent’s son, Erik, testified that the Decedent wanted the bank account should be split 3 ways and the only reason Son was on the account was to help Decedent pay bills. Son also testified that he used the bank account for the Decedent’s care and that he did not withdraw any funds for his personal use during the Decedent’s lifetime. Decedent’s neighbor testified that he visited Decedent prior to his death and they discussed the bank account and that Decedent intended for the account to be split between his 3 children. Amazingly, the neighbor took contemporaneous notes of the conversation which were admitted into evidence.
The probate court determined that the account was a convenience account even though the JTWROS box was checked on the the bank signature card.
The probate court, with minimal oral findings also entered a contempt ruling “ten minutes after receiving” the order from the attorney against Son because Son had spent all the money. The hearing determined that he was in direct civil contempt of court because he could not return the funds to the estate. The contempt order contained a purge amount of $314,168.41 and imposed sanctions in the form of daily and escalating fines.
Son appealed the contempt order and argued that the account was not a convenience account and that he was entitled to the bank account as the box checked was JTWROS. Son argued that, because the box for the convenience account was not checked, an irrebuttable presumption arose that the card controlled.
However Florida Law states that the presumption created by the choice selected on the signature care is rebuttable and MAY be overcome by clear and convincing proof of a contrary intent.
The appellate court found competent substantial evidence of a clear and convincing nature supporting the probate court’s conclusion that “decedent intended for this account to be a convenience account, rather than a joint account with a right of survivorship”. The appellate court affirmed the probate court.
As far as the contempt order, the appellate court determined that the probate court “improperly delegated the preparation of the contempt order and created the appearance that, in entering the contempt order the probate court, did not exercise independent judgment.”
ADVICE: When discussing with your client these “convenience” accounts be sure that their intent is clear as to whether the account should be solely for the joint owner or part of the estate. Many problems can be avoided by properly designating the account at the opening of the account. Unfortunately, many times the issue is not found until the death of the original account owner. This case provides facts regarding evidence necessary to overturn the JTWROS presumption.
WORD OF THE WEEK: What is the difference between an irrebuttable presumption and rebuttable presumption? An irrebuttable presumption is one which the law does not allow to be defeated and is conclusive at all times. A rebuttable presumption is one which the law allows to be defeated or shift the burden of proof.
For example, if a bank account is titled in a husband and wife’s name there is a rebuttable presumption that the account is held as tenants by the entireties (“TBE”) and such an account is protected from a creditor of either the husband or wife because the account is deemed to be owned by both of them and a creditor of only one of them can not attach the other spouse’s assets. However, if a creditor has competent evidence that the intent was to create a JTWROS instead of a TBE, then the creditor could have access to 1/2 of the bank account.
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