In this case, the Supreme Court of New York considered whether a joint bank account is estate property. It is commonly believed that with a joint bank account there is always the right of survivorship. This would mean that when one of the joint owners passes away, the proceeds of a joint bank account bypasses probate and automatically goes to the remaining joint owner. Under New York law, this is not the case.
In In re Najjar, the decedent and the respondent were joint owners of 4 bank accounts. The petitioner initiated estate litigation because she felt that money in the bank accounts was the property of the decedent alone and, upon her death, became the property of the decedent’ estate. The petition sought a declaration that the money in the joint bank accounts property belonged to the estate. Further, because the petition was also a co-executor of the decedent’s estate, the petitioner accused the respondent of unjust enrichment and breach of fiduciary duty. In response, the respondent sought summary judgment declaring that as the joint owner of the accounts, she was entitled to all of the money.
Under New York law, upon the death of one of the owners, ownership of the joint bank account does not automatically remain with the surviving owner. New York banking law states that a joint bank account creates a joint tenancy with right of survivorship only when the signature card for the account indicates the parties intended the right of survivorship to apply. Banking Law § 675 (a). In Najjar, the signature card did not have the right of survivorship designation. Thus, the respondent was not able to establish that under Banking Law § 675 there existed a statutory presumption of the survivorship.
However, the inquiry does not end there. Instead, there is a burden shift. The respondent had the burden of proving by other evidence that the parties intended the account to have survivorship rights. The respondent was able to do just that. She produced documents that referenced the names of both the decedent and the respondent and that also include survivorship or joint tenancy language.
The petitioner, however, was given the opportunity to submit more evidence. The petitioner’s evidence indicated that the decedent, and the decedent only asserted control over the account. In fact, the evidence produced by the petitioner showed that the decedent was the only one who funded the accounts and that the decedent used the account for her benefit only. The evidenced indicated that the respondent’s activities related to the bank accounts were only to help the decedent with her banking. In other words, the evidence indicated that the respondent was added to the account only out of convenient because at the time the decedent was in her 80s and needed assistance with some of the banking-related tasks.
Because of the evidence produced by the petitioner, the court found that there were triable questions of fact raised with respect to the question of ownership of some of the 4 bank accounts.
Thus, when it comes whether a survivor is legally entitled to the money in jointly owned bank accounts, the court will first seek to determine if the signatures cards indicated that the account had survivorship rights. If the card does not show survivorship rights, the burden shifts to the party asserting those rights to produce evidence that the parties intended there to be survivorship rights. If that burden is met, the burden shifts back to the party challenging survivorship rights to disprove that the account was treated by the parties as a joint account. If a party was made joint owner simply for convenience reasons, the court may conclude that there is no joint tenancy with right of survivorship.