WA-Probate > Probate-Litigation > Undoing Joint Tenancy Rights of Survivorship After Death

O.  "Undoing" Joint Tenancy Rights of Survivorship After Death

1. The Typical Situation

2. Decedent's Intent in Creating the Joint Tenancy

3. Decedent's Lack of Capacity While Creating the JTWROS Account

4. Signatory's Wrongful Actions During Creation of the JTWROS Account

5. Signatory's Ownership of Funds During Depositor's Life

1.  The Typical Situation    ñ

• Adult children expecting to take an equal share of the estate of the last of their parents to die, as the parent had consistently told them they would.
   

• The parent dies.
   

• The children now find that the parent's assets were put into joint tenancy form with right of survivorship.  Typically:

  • Just before the parent's death, and

  • By a favorite child or a recent acquaintance (such as a recently employed care-taker) acting as an Attorney-in-Fact for the parent under the parent's Durable Power of Attorney.
     

• Consequently, the assets pass instead to the favorite child or the recent acquaintance as the surviving joint tenant.

Query: How may the joint tenancy's right of survivorship be "undone" after their parent's death, resulting in the asset falling back into the parent's probate estate and being distributed either under the parent's Will to its beneficiaries or by intestate succession (ie, inheritance) to the parent's heirs --- presumably, in either case, to all the parent's children in equal shares?

2.  Decedent's Intent in Creating the Joint Tenancy    ñ

Consider the following hypothetical situation:

• The joint asset in question is a joint tenancy bank account.
   

• The joint account expressly provides for right of survivorship ("JTWROS").
   

• The account was created on or after July 1, 1982, so the current law regarding joint tenancy bank accounts applies to it.
   

• The account is in the names of two persons, a depositor and a signatory.
   

• The depositor (eg, an elderly parent - soon to become the Decedent) is the contributor of its funds .
   

• The signatory (eg, the parent's "favorite child," caretaker, or Attorney-in-Fact - soon to become the survivor) is not a contributor of any of its funds (ie, is not truly a depositor) but is authorized to deposit checks payable to the depositor into the account and to write checks on it for the benefit of the depositor --- the situation commonly called "joint tenancy for convenience only."

As discussed in Special Case #1: Joint Tenancy Bank Accounts, on the page Joint Tenancies, of the website section Washington Probate Avoidance, upon the depositor-Decedent's death, then, with one specific exception, the account's funds belong to the signatory.

Exception:  If clear and convincing evidence shows that the depositor-Decedent intended otherwise when the account was created.  RCW 30.22.100(3)  [There are other, general exceptions, ignored here, as any transfer of property is susceptible to the same attack as the making of a Will, ie, the grounds for bringing a Will Contest, eg, lack of capacity, undue influence, fraud, duress, etc.]

Consequently:

• This statute creates a "rebuttable presumption" that the depositor-Decedent intended the account to pass by right of survivorship at his/her death to the signatory.  But:
   

• This rebuttable presumption may be overcome by "clear and convincing" evidence that the depositor-Decedent intended otherwise when the account was created.  And:
   

• If the presumption is overcome, the account's right of survivorship is "undone," and its funds will fall back into the Decedent's estate.

In the typical case, when he/she created the account, the depositor-Decedent was in declining health, thinking (if at all) moment to moment and not about the future, such as what would happen to the account at his/her death --- his/her immediate needs and motivation were to find someone available now to manage his/her financial affairs and pay his/her bills during his/her waning days.

Washington Cases "Undoing" or Potentially Undoing the Right of Survivorship Due to Decedent's Alternative Intent:

• Estate of Davis, 23 Wn. App. 384 (1979); rev. denied 92 Wn.2d 1026 (1979).  Decedent died survived by four adult children.  His fifth child, a daughter and the wife of the account signatory, predeceased him by three days.  Decedent, an invalid, had lived with the daughter and her husband for 12 years prior to his death.  During that period, Decedent and the husband had opened several JTWROS bank accounts in their names solely with Decedent's funds.  Occasionally, the husband, as signatory, made deposits and withdrawals on Decedent's behalf.  The Trial Court found "substantial evidence that the presumption of intent was rebutted, and that [Decedent] intended those funds to go to his children upon his death, rather than to [the husband]" and awarded the funds to Decedent's estate.  At page 385.  The Court of Appeals affirmed the judgment.
   

• Tripp v Scott, 29 Wn. App. 869 (1981).  Decedent died survived by his natural daughter ("Scott") and his two adopted daughters ("Tripp" and "Foster").  Three years before his death, Decedent and his then living wife moved to Spokane, where Tripp and Foster cared for them thereafter.  Nine months later, Decedent's wife died, and five months after that, Decedent moved to Naches, where Scott could take care of him.  A month later, Decedent revised his Will, providing that all of his daughters share equally in his estate and naming Scott as Executor.  Around this time, Decedent also deposited the bulk of his estate in JTWROS bank accounts with Scott as signatory.  Decedent's health declined, and he died 18 months later.
  
  Tripp and Foster brought an action for misappropriation, alleging that Scott, as Executor, had failed in her duties by not dividing the bank account funds equally among the three sisters.  The Trial Court granted Scott's Motion for Summary Judgment, on the basis of prior law that provided for a conclusive presumption of intent, instead of the current law's rebuttable presumption.  The Court of Appeals held that Scott was not entitled to the conclusive presumption, opined "It is possible to infer from his will an intent that these funds should be equally divided among all three beneficiaries." (At page 874.), and remanded the case for trial on the issue of Decedent's intent.  In footnote 5, the Court said, "[Foster] stated in her deposition: 'The only thing he said is that he is making her [Executor], and that she was to divide everything between the three of us.  He said she would take care of it, so we just assumed she would.'"
   

• Estate of Oney, 31 Wn. App. 325 (1982); rev. denied 97 Wn.2d 1023 (1982).  Decedent died survived by neither a spouse nor any children.  In his Will, he left his substantial estate equally to his four siblings.  Before he died and while he was ill, he changed three bank accounts to JTWROS with his eldest sister, who he also named in his Will as his Executor, as a signatory.  The Court stated, "Here, there is some evidence that the presumption of joint tenancy was rebutted by [the signatory] herself, who testified:

The Court then considered whether Decedent intended to make a gift to the signatory:

The Court remanded the case to the trial court "for the purpose of making a factual finding as to the Decedent's intent when he created the accounts with the signatory as a joint tenant, ... whether he intended it to be with right of survivorship, a gift, or if her name was added merely as a convenience."  At pages 329-30.

No pertinent Washington cases have been found confirming the Right of Survivorship.

3.  Decedent's Lack of Capacity While Creating the JTWROS Account    ñ

As in the case of challenging the making of a Will, a JTWROS bank account may be challenged on the basis that Decedent lacked capacity to make it.  No pertinent Washington cases have been found in which a Court has addressed solely the issue of a Decedent's lack of capacity while creating a JTWROS account.

4.  Signatory's Wrongful Actions During Creation of the JTWROS Account    ñ

Also as in the case of challenging the making of a Will, a JTWROS account may be challenged on the basis that during its creation, the signatory acted fraudulently or by duress or undue influence.  See: Based on "Lack of a Testator," in the Questions about a Will section of WASHINGTON PROBATE LITIGATION.

Washington Cases "Undoing" or Potentially Undoing the Right of Survivorship Due to the Signatory's Undue Influence:

• Doty v. Anderson, 17 Wn. App. 464 (1977).  Decedent died survived by her only son, presumably her only heir.  She was elderly, and her mental and physical health had deteriorated in the last few months before her death, on March 20, 1975.  For several years before then, she had been assisted by Mrs. Wallace, a neighbor, in cooking, running errands, and paying bills.  In October and November, 1974, Mrs. Wallace requested another person, Mrs. Anderson, to accompany her to the bank to cash Decedent's checks.  Thereafter, apparently under Decedent's direction, Mrs. Anderson took over the management of Decedent's money.  In January, 1975, Decedent executed new signature cards for her existing accounts, creating JTWROS accounts with Mrs. Anderson, who also executed the signature cards.  During January and February of 1975, Decedent signed three checks totaling $3,000.  Mrs. Anderson cashed the first $500 check and kept the money for Decedent, who used all of it.  Mrs. Anderson cashed the second $500 check, kept the money to pay for Decedent's bills, used $30 for that purpose, and later acknowledged that the remaining $470 belonged to Decedent's estate.  The third check, for $2,000, was payable to Mrs. Anderson, who claimed it was a gift to defray her medical expenses.  Following Decedent's death, Mrs. Anderson transferred the funds from Decedent's JTWROS accounts to her own account.
  
  Decedent's son brought an action to recover the money that had been in the JTWROS accounts and the portion of the $3,000 checks kept by Mrs. Anderson.  The trial Court entered judgment for the son.  The Court of Appeals found that the same factors determining undue influence in the making of a Will controlled in the making of a JTWROS account:

The Court then applied these considerations to the facts at hand:

The Court concluded, "[T]here is sufficient evidence, by the clear, cogent, and convincing standard, to overcome the statutory presumption that [Decedent] intended to transform her bank accounts into joint tenancy with [the signatory]."  At page 470.  See also: Estate of Randmel v. Pounds, 38 Wn. App. 401 (1984).

5.  Signatory's Ownership of Funds During Depositor's Life    ñ

During the life of a depositor:

• The depositor is the one who is considered to own the funds in the account.  RCW 30.22.040(11)
   

• If there is more than one depositor, they are considered to own the funds in the account in the same proportion as each has deposited net funds into the account.  RCW 30.22.090(2)
   

• By creating a joint account, a depositor does not make a present gift of the funds to the signatory.  Estate of Krappes, 121 Wn. App. 653 (2004).
   

• A signatory has no ownership interest in the account.  Estate of Lennon, 108 Wn. App. 167 (2001).
   

• Any joint tenant has the right to withdraw all of the funds, and the bank may pay all the funds to any joint tenant regardless of whether any other joint tenant is alive, legally disabled, or deceased.  RCW 30.22.140
  
  Note: this does not establish ownership of the funds among parties to the account - it only allows any of the parties to make a withdrawal and exculpates the bank from responsibility to the other parties upon one party's withdrawal of funds.

Caution: Right of withdrawal is not the same as right of ownership.  While the depositor is alive:

• "Funds on deposit in a joint account belong to each depositor in proportion to their ownership of the funds.  ...  Although [a signatory has] a right as joint tenant to withdraw the funds, they [do] not belong to [him/her]."  Estate of Tosh, 83 Wn. App. 158, 166 (1996).
   

• Signing a joint tenancy signature card does not make a signatory the present owner of any of the account's funds --- it only evidences the parties' present intent of future right of survivorship, upon the depositor's death.  State v. Mora, 110 Wn. App. 850 (2002); Estate of Krappes, 121 Wn. App. 653 (2004).
   

• If a signatory withdraws funds with the depositor's consent, the withdrawal is a gift from the depositor to the signatory.
   

• If a signatory withdraws funds without the depositor's consent, the withdrawal is theft.  State v. Mora, cited above [Signatory convicted of theft of joint tenancy account funds].  The wrongfully withdrawn funds belong to the depositor (or, if he/she has died, his/her estate, unless it can be shown that such would result in unjust enrichment, in which case the funds will be returned to the surviving joint tenant through the imposition of a constructive trust).  Estate of Krappes, 121 Wn. App. 653 (2004).

See also RCW 11.86.011, which provides, at least for purposes of disclaimers, "A joint tenancy interest of a deceased joint tenant shall be deemed to be transferred at the death of the joint tenant rather than at the creation of the joint tenancy."

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