Sometimes parents do things for their children that are well-meaning, but not REALLY meant. This case shows the consequences of one of these kinds of decisions.
Martin invested $50,000 in a money market account in 1998, and he named him and his daughter, Lindsey, as joint owners, which was defined as joint tenants with right of survivorship. Lindsey did not contribute any funds to the account.
Martin’s health began to decline. In 2018, Solomon, Martin’s wife, called the investment company with Martin to request that all funds in the joint account be withdrawn and the account closed. A check was issued to “Martin or Lindsey” and overnighted to Martin’s address. Unfortunately, Marin died the same day the check was issued.
Solomon was appointed personal representative of Martin’s estate and deposited the check in an estate account. Two months later, Lindsey learned about Martin’s request and the check, and she filed suit to recover those funds. The parties filed cross-motions for summary judgment, and the trial court granted summary judgment to Lindsey. Solomon appealed.
The dispute between the parties focused on whether Martin properly closed the joint account. Lindsey argued that he did not, so the funds were still jointly held and she was entitled to them. Solomon argued that the funds were lawfully withdrawn, and were no longer held jointly once the check was issued.
Lindsey was right because Indiana’s statutes provide that ownership of a joint account may only be altered by a signed, written order given to the financial institution during the party’s lifetime. Martin did not do this—he made a phone call on which Solomon primarily spoke. And this lack of a writing meant that the funds went to the joint owner of the account—Lindsey.
The fact that the balance on the joint account had been zeroed out by Guggenheim and the funds moved into a check redemption account in Guggenheim’s name does not have the importance Solomon PR would ascribe. … But we cannot agree that bank processes have any bearing on the ownership of clearly marked funds from Martin and Lindsey’s joint account. That the money has to be held somewhere after it is withdrawn and before it becomes available to the account owner does not change the fact that the money is the account owner’s.
In an interesting footnote, the Court noted another statute that was “not argued by the parties or addressed by the trial court” that could have supported Lindsey’s argument for summary judgment.
This statute said that joint tenants in an account owned the account in the proportion that they contributed to the account. The Court went on to describe how this statute could have applied to Lindsey’s case. The Court’s sua sponte decision to raise and resolve this issue is interesting, and will be noteworthy to lawyers dealing with these kinds of issues in the future.
1. When a joint account is established, it can only be closed in writing; a phone call is not sufficient.
2. A joint account holder’s apparent intent to close that joint account is insufficient to actually end the joint tenancy.