In re Estate of Filfiley

Brief Fact Summary.

Mrs. Filfiley opened a trust account of Defendant, her daughter. Later, Mrs. Filfiley converted the trust account into a joint account with Defendant. Before Mrs. Filfiley’s death, Defendant emptied the joint account and placed the funds in another account under Defendant’s name. Plaintiff, Mr. Filfiley filed a notice of election against the will and wanted to place the joint account into the will. Defendant claims she was authorized by Mrs. Filfiley to withdraw the funds from the joint account. 

Synopsis of Rule of Law.

A surviving joint tenant of a bank account with the right of survivorship may withdraw all the account’s funds prior to the other joint tenant’s death, unless there is evidence that the deceased joint tenant objected to the withdrawal. 

Facts.

Mrs. Filfiley opened a trust account for her daughter, Alice Filfiley, Defendant. Later, Mrs. Filfiley then converted the trust account to a joint bank account with under herself and Defendant. One day before Mrs. Filfiley’s death, Defendant withdrew the entire amount from the joint account and deposited it into another separate account under her name. Subsequently, Mrs. Filfiley’s husband, Plaintiff,attempted to include the joint account into Mrs. Filfiley’s will.Thus, Mr. Filfiley filed a notice of election against the will. At trial, Mr. Filfiley asserted that the account was truly a convenience account, not a true joint-tenancy account. Additionally, Mr. Filfiley asserted that Mrs. Filfiley did not have the mental capacity to create the account at the time of creation.Defendant contended that Mrs. Filfiley had previously authorized her to make the withdrawal from the joint bank account. Furthermore, Mr. Filfiley and Defendant allege to be the source of the accounts funds, but neither party has introduced evidence to prove the assertion. The Surrogate’s Court of King’s County, New York held a discovery proceeding to determine Defendant’s rights to the joint bank account.

Issue.

Whether a surviving joint tenant of a bank account with the right of survivorship may withdraw all the account’s funds prior to the other joint tenant’s death.

Held.

Yes, a surviving joint tenant of a bank account with the right of survivorship may withdraw all the account’s funds prior to the other joint tenant’s death, unless there is evidence that the deceased joint tenant objected to the withdrawal.

Discussion.

A surviving joint tenant of a bank account with the right of survivorship may withdraw all the account’s funds prior to the other joint tenant’s death, unless there is evidence that the deceased joint tenant objected to the withdrawal. Under Banking Law § 675, each joint bank account depositor is entitled to own the account as a joint tenant. Further, each depositor, joint tenant, has the right to an undivided half, or moiety, of the account. Unless the evidence indicates otherwise, a joint account establishes a presumption of the depositors’ intent to transfer a present right in half of the deposit in both depositors and to create a right of survivorship for the surviving party to, giving the latter the entire amount remaining in the account. One challenging title to an account may overcome this presumption by establishing that the creator of the account did not intend to transfer a present right in the account or to create the right of survivorship to the joint tenant. Cases clearly state that in a valid joint tenancy, the entire remaining funds vests in the surviving joint tenant, unless the tenancy is complicatedlifetime withdrawal issues. Additionally, case law also indicates that either joint tenant has the authority to unilaterally withdraw an amount up to his half share while each tenant is alive. Further, if one joint tenant withdraws more than his or her share during the other joint tenant’s lifetime, the wronged joint tenant is entitled recover the excess amount. However, case law does not clearly establish whether the wronged tenant’s estate has standing to recover the excess amount when the joint tenant’s excessive withdrawal takes place before to the tenant’s death. Nonetheless, under a joint tenancy, the survivor is entitled to all the funds in the account, regardless of the circumstances. In this case, there was a true joint tenancy exists between Mrs. Filfiley and Defendant, as shown by the statutory presumption in favor of a joint tenancy and other substantiated evidence. Therefore, Defendant is entitled to the entire amount in the account, and Defendant’s withdrawal of the fund before Mrs. Filfiley’s death is a nullity.