Often times, in order to simplify writing checks on behalf of an elderly individual or one whose capacity may be failing, individuals may agree to open a joint account which would then permit the person who is providing assistance to write checks on behalf of the individual who actually has deposited the funds into the account.  This typical joint account with right of survivorship is subject to the Multi Party Deposit Account Act.  This Act has important implications with regard to matters wherein the subject account may be a substantial asset of the Estate once the true owner of the account passes away.  It is for these reasons that you should be aware of the Multi Party Deposit Account Act.

 

Under the Multi Party Deposit Account Act, the joint account belongs to the parties in proportion to the net contribution by each to the sums on deposit unless the terms of the contract indicate a different intent or there is clear and convincing evidence of a different intent at the time the account was created. In other words, if one party deposits all the account funds into the account during their life, then in that event, this party owns all the funds contributed to the account. At the time of death of one party to the joint account, however, there is a reputable presumption that a right of survivorship was created in the remaining party. This means that the sums remaining on deposit at the death of a party through a joint account belong to the surviving party, or parties, against the Estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created. As such, the account would pass to the survivor under the account, unless there is clear and convincing evidence that the account was created as a matter of convenience to assist the decedent during his life, or there is other evidence which demonstrates by clear and convincing evidence that the account was not to pass to the survivor upon the death of the decedent. Clearly, this is important when considering how funds may pass to the Estate.

 

In a recent decision, the Court also found that not only may it consider evidence at the time the account is created, but moreover, that the Court may also consider evidence after the account was created to determine whether or not the account was one of merely convenience, or the account passed to the survivor at the death of one party to the account. The standard is whether there is evidence of a clear and convincing nature which demonstrates that the right of survivorship has been invalidated by prior intentions of the true owner of the account. The case law differs, however, whether the account was created as a means of convenience in lieu of the operation of the Power of Attorney or a similar instrument. As discussed above, recent case law has held that the intention of the owner to the account may be revealed at a time long after its creation if the parties’ conduct throughout the time that the account was maintained demonstrates its convenient nature. Regardless you should always be aware of the impact of The Multi Party Deposit Accounts Act as it relates to what assets may compromise an Estate.