EFFECT OF WITHDRAWALS FROM A JOINT ACCOUNT

Nephew and uncle had a joint bank account. Nephew withdrew all of the funds in the account and uncle died 6 months thereafter. People who would inherit under the uncle’s Will claimed that the joint account was one of convenience (in other words there was no intent that the account be a survivorship account with a right in the surviving owner to be entitled to the full account). Parents frequently create joint accounts with children for the purpose of allowing the children access to the funds in the event that the child needs to use the funds for the parent’s benefit. It is usually unclear whether the parent intends that upon the parent’s death the funds in the account go to the surviving child (this is called a "right of survivorship"). In the absence of evidence indicating that the parent meant to create a convenience account only, the courts treat the account as a survivorship account. So if nephew did not take out those funds he would have been entitled to those funds upon the uncle’s death. But because he took out the funds, he exceeded his 50% interest while uncle was alive. In other words while a person has a right to access the funds in a joint account, you can not take out more than your 50% interest for yourself. The court was not convinced that the nephew had taken the funds for the use of the uncle as the nephew explained. That being the case, 50% of the account belonged to the estate and was not available to the nephew.