New York Probate and Estate Administration Lawyer Blog
Not all property owned by decedent is probate property that is subject to the decedent’s will or intestate distribution. Property that is jointly owned by the decedent with another person withs survivorship rights typically becomes the property of the surviving account owner upon the death of the other account holder. This is a rebuttable presumption.
In the case of In re Estate of Butta, the Surrogate’s Court, Bronx County was asked to determine whether a bank account was held jointly out of convenience of if it was the intention of the depositor for the other account holder to gift the account to them.
Background
After Helen Butta’s husband died, Butta’s great-nephew, plaintiff Nicholas Pagani, helped Butta with minor chores and errands. Several years into this arrangement, Butta opened a joint bank account in her name and Pagani’s name and deposited $240,000 into the account. The account has a right of survivorship.
For the next three years, Pagani made withdrawals from the account for his personal use. Butta was aware that Pagani was taking money of the account for his personal use because she received bank statements and canceled checks showing this activity. While Butta declared the joint account’s income on her personal taxes, she never withdrew any money from the account.
At the time of her death, Butta had an estate worth about $4 million. She had a will. the will did not leave anything to Pagani. After Butta’s death, the joint account contained approximately $150,000. Pagani petitioned the Surrogate’s Court to be declared the account’s sole owner. The executor of Butta’s estate objected, arguing that the account was a convenience account belonging solely to Butta and that Pagani had exerted undue influence over Butta to gain access to the account.
Discussion
The issue before the court was whether there was a rebuttable presumption that the surviving account owner has title to the money at the depositor’s death. For a joint account with a right of survivorship, if one account owner dies, the surviving owner automatically owns the entire account without the need to go through probate. Thus, if a person deposits money into a joint account with right of survivorship, the depositor presumably intends for the money to go to the surviving account owner at the depositor’s death.
However, the survivor’s ownership presumption may be rebutted. For instance, if the survivor had a position of confidence or power and used undue influence to obtain joint-owner status from the depositor, the survivor’s ownership interest in the account might not be valid. Alternatively, if the depositor meant to create only a convenience account, not a true joint account, the survivor has no ownership interest. A convenience account belongs solely to one person but gives authority to a second person to make deposits and withdrawals on the owner’s behalf in order to make banking more convenient for the owner. If the owner of a convenience account dies, the account becomes part of the owner’s estate.
Here, based on the evidence about the bank’s account types, this account must have been a joint account with right of survivorship. Thus, a rebuttable presumption exists that Butta intended for the account and its contents to transfer to Pagani at Butta’s death. The executor failed to rebut the statutory presumption by clear and convincing evidence that the account was merely one of convenience, especially in light of the decedent’s failure upon receipt of her bank statements to object to petitioner’s withdrawals from the account.
The decedent knew that the account was being used solely for Pagani’s benefit, which shows that she did not intend for the account to be a convenience account. Further, Pagani helped Butta with only minor chores, and Butta did not include Pagani as a beneficiary of her $4 million estate. Thus, the evidence does not support a finding that Pagani had sufficient influence over Butta to coerce her into making him a joint owner of the account. Accordingly, as the surviving owner of the joint account, Pagani is now the account’s sole owner.