Wealth Transfer: Multi-Party Joint Deposit Account Act
In general, the funds within a joint account belong to the account holders and all account holders have the right to the entirety of the account. Should one of the joint account holders pass away, it is generally accepted law that the account would then pass to the surviving account holder(s). Under the Multi-Party Joint Deposit Account Act, this is typically what occurs should an account holder pass away; however, there are exceptions to this general rule of law.
Typically, the sums remaining in a joint account pass to the surviving joint account holder(s). Under the Multi-Party Joint Deposit Account Act, however, there are some exceptions which have appeared within the relevant case law, as well as annotations to the statute itself. For example, if the account was established by the Decedent solely for the purpose of convenience to allow another party to write checks on their behalf or, under circumstances which indicate that there was never a clear intent for the surviving account holder to keep the proceeds of the account, the Court may find that the account actually belongs to the Estate of the Decedent instead of the surviving party. This could be demonstrated by documents and/or testimony which evidence that it was the Decedent’s intent for the account to pass to his Estate and not solely to the surviving party.
The proceeds in a joint account may also pass to the Decedent’s Estate and not to the surviving member if it is shown that the surviving member was in a confidential relationship with the Decedent at the time the account was created. In such instances, the burden of proof would be then shifted to the surviving account holder to demonstrate by clear and convincing evidence that the decedent intended them to be the beneficiary of the account upon death. In such a scenario, the surviving joint account holder would have to meet a very high burden of proof in demonstrating that the decedent intended for them to receive the proceeds upon death, or the account will revert to the decedent’s estate. If no confidential relationship existed, then it is the contesting party’s burden of proof to demonstrate that the account should pass outside of the Multi-Party Joint Deposit Account Act to the decedent’s estate if they can show that the account was for convenience, as set forth above, or if there were suspicious circumstances surrounding the designation as a joint account.
In the context of litigation, challenging a joint account designation can be tricky and is very similar to a Will contest. Regardless, these joint accounts can also be very substantial in nature, and at times, can be the main or sole asset of the Estate.