Hypothetical:
Years ago, my girlfriend (Gertrude) and I opened a bank account near our homes, in West Palm Beach, initially depositing a negligible amount each. The account was, and it remains, in both of our names. Over the years, I contributed all of my gambling winnings to the account. Gertrude contributed around a quarter of what I did during that time. We generally used the account's funds to pay for (i) vacations we took together (approximately 40%); and (ii) my collection of high-priced cashmere suits (approximately 60%). One day, Gertrude withdrew $200,000, leaving about $100 remaining in the account. She then “ghosted” me and moved in with her new boyfriend down the street. Do I have any rights here?
Multiple-party accounts in Florida can induce headaches. I created this hypothetical because it addresses widespread misconceptions about accountability. False assumptions relating to multiple-party accounts may deter individuals from raising viable claims. Recently, I spoke about these and similar issues, in the context of guardianship, to the SWFL Chapter of the Florida State Guardianship Association. Simply put, people tend to oversimplify in this area. They incorrectly assume the mere existence of any account naming multiple persons, without more, grants a non-depositing party free rein to all amounts on deposit, without accountability to the depositor. This thinking is crude and inaccurate. It conflates the rights and obligations that each person has relative to the bank, for instance, over those that each has relative to the other person. Even so, the view is shared by laypersons, banking personnel, and even some attorneys.
To the questioner, you're not necessarily out of luck. Let's assume Florida law applies, and we'll start by framing the issue. Sometimes, joint-asset questions turn on default gifting or ownership presumptions, absent a showing by another party to the contrary. However, the suggestion that everything a contributing party deposits into a “joint” account is presumed immediately gifted in full, with no accountability to the depositor, is a legal contortion.
What this question does not concern – narrowing the facts and law
- First, you and Gertrude were not married at any point.
- Second, you and Gertrude, I assume, are alive. The survivorship presumption for multi-person accounts, under § 655.79(1), Fla. Stat., is not relevant to this question. Indeed, a contributing joint tenant often intends that the account have little remaining at the time of his/her/their death.
- Third, your interest relating to the “negligible” initial deposit is not material. Rather, we are concerned about your recurring contributions of gambling winnings. You made these after you opened the account.
- Fourth, in view of our narrowed facts and concerns, the Florida Statutes do not control the result.
Consider Sandler v. Jaffe, 913 So. 2d 1205 (Fla. 4th DCA 2005). In Sandler, a mother added her daughter's name to a savings account, alleging later that this action was “in contemplation of [the mother's] incapacity due to her advancing age.” Id. at 1206. Approximately one year before the mother died, the savings account, which the mother had fully funded, held a balance close to $90,000. Around this time, the daughter withdrew $84,000 and “transferred the[se] funds to a new account, titled in the name of her husband and daughter . . . in New York.” Id. Filing suit against her daughter, the mother alleged that she, as the sole contributor to the account, did not consent to, or even know in advance about, the daughter's withdrawal. Id. at 1206–07. The court's decision focused primarily on chapter 655, Florida Statutes, including its limited reach. Specifically, the court considered whether the provisions designed to protect banks against liability were inconsistent with the mother's theory of liability against her daughter. Answering no, the court observed that “[a]t trial, [daughter] improperly relied on section 655.78(1), Florida Statutes (2003), to advance her position that as a joint owner of the account she was entitled to withdraw the funds.” Id. at 1207. Then, the court explained the true statutory role of the language cited by the daughter:
The intent of section 655.78(1) is to protect a financial institution from liability for distributing funds from a multiple-party account to any of the individual account holders. However, the relationship between a banking institution and the holders of a joint account does not in any manner shape the relationship between the account holders themselves. As such, while [daughter] was authorized to withdraw the funds, she was not authorized to use the funds for her personal benefit.
Id. (boldfaced added) (citation omitted). In the year following Sandler, the court expounded this area. It described the rights arising from a “pooled checking account” held as a joint tenancy with right of survivorship.
In such an account, each tenant “has the right, against the other, only to his or her individual interest in the account” during the lifetime of the joint tenants; funds in the account belong to the parties in proportion to the net contributions by each to the sums on deposit.
Joseph v. Chanin, 940 So. 2d 483, 486 (Fla. 4th DCA 2006) (quoting Nationsbank v. Coastal Utils., Inc., 814 So.2d 1227, 1229 (Fla. 4th DCA 2002)) (boldfaced added).
- Fifth, similar to the last point, signature cards and account agreements with banks generally will not, and should not, control the relative shares between (or among) unmarried parties during their lives. See, e.g., In re Guardianship of Medley, 573 So. 2d 892, 900 (Fla. 2d DCA 1990), cause dismissed, 629 So. 2d 134 (Fla. 1993), disapproved on other grounds by Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001) (observing that “signature card provisions permitting withdrawals of account funds by either of two owners of an account are not determinative of the kind of ownership interest in the funds in the account . . . .”). (1)
After all, banks are concerned with their own liability. Account agreements may adopt uniform assumptions regarding how they treat named parties for “joint accounts.” They may reinforce or supplement statutory protections against liability. Typically, though, banks will not insert themselves between two unmarried parties, presuming to know or even care about the extent (e.g., percentage) of each party's lifetime interest relative to the other.
So how is your relative interest determined?
At this point, here is a more refined issue statement: Under Florida law, for a multiple-party account of unmarried persons, how are relative interests of the persons determined during their lifetimes in relation to amounts contributed after the account is opened?
On this issue, ask yourself the following of the party claiming an ownership interest in such account: (i) whether that party has made any net contributions; and (ii) if so, whether they are disproportionately low in relation to the ownership interest claimed.
Now consider the part of the account that is proportionate to your net contributions. Can the other party show that you gifted some or all of that part? Among other things, this would require that you held a then-present donative intent, to immediately pass title, to some or all of the contributed amounts on deposit.
Generally, absent a presumption of gift, the burden imposed on a non-depositing party, at least in Florida's Fourth DCA, is the following:
In order to establish that a non-depositing party is entitled to funds held in a joint account, that party must show: (1) that the depositor/donor had a clear intention to transfer a present interest; (2) delivery by surrender of dominion and control to the donee; and (3) acceptance of the gift by the donee.
Mulato v. Mulato, 705 So. 2d 57, 61 (Fla. 4th DCA 1997). In addition, “the presumption that a gift was intended by the depositor of funds into a joint account applies only to the funds remaining at the depositor's death.” Id.
To be fair, over the years, Florida courts have not been consistent in multi-party account decisions, particularly when addressing the applicability and effect of gifting and ownership presumptions, under §§ 90.301- 90.304, Fla. Stat., along with the associated burdens. In my view, the courts have, on occasion, inappropriately extended or misapplied certain presumptions, in situations defying common sense, realistic expectations, and precedent.
In any event, we'll assume that you can substantiate and attest to the contributions that you and Gertrude each made, along with the related uses. Thus, we have no problems with attribution and leave the court little excuse to fall back on an ill-suited default presumption (e.g., 50-50). Arguably, you and Gertrude funded your vacations equally and jointly, by effectively contributing half each. That is, you each apparently contributed one-half of the 40% corresponding to vacation usage of the account. You contributed the remaining 60% attributable to purchasing your cashmere suits. Ideally, these assumptions also comport with the timing and other patterns of the individual contributions and uses, to more readily support an inference of your contemporaneous intent. (We've been assuming your inter vivos intent was to bifurcate the account ownership according to vacation and cashmere usages.) Additionally, it would be prudent to verify there were no external understandings, side agreements, exigencies, etc. that may complicate the factual record on your intent. These issues would likely arise during discovery and should be identified in advance.
As you can tell, even a website hypothetical in this area requires significant analysis. It is not open and shut, and Gertrude cannot simply wave the “joint account” flag to defeat liability. Hopefully, you'll benefit from favorable presumptions applied by the court. Regardless, depositor intentions are critical. If the facts align with the above assumptions, you have a reasonable likelihood of obtaining court-ordered accountability for Gertrude's withdrawal.
(1) However, in addressing the effect of signature-card language on the form of ownership between married persons, the Supreme Court of Florida, in a third-party creditor vs. married-debtor context, placed limited significance on signature cards. “If a signature card does not expressly disclaim a tenancy by the entireties form of ownership, a rebuttable presumption arises that a tenancy by the entireties exists provided that all the other unities necessary for a tenancy by the entireties are established.” Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45, 60 (Fla. 2001). This rule was partially codified in 2008, at § 655.79(1), Fla. Stat. (last sentence).
Content posted July 1, 2023.
