Joint accounts—the most confusing asset in the estate planning word. Especially joint bank accounts. They start off relatively harmless with a parent naming one of their children as a joint account holder to help pay bills and manage finances. But rather than add a child only as an agent over the account (which would expire at death), people invariably add a child as a joint account owner with the right of survivorship—meaning that one child gets all the assets left in that account after the parent dies.
The confusion about joint accounts comes from misinformation on how a Will or Trust controls joint accounts. That is to say, they don’t. Nothing contained in a Will or a Trust affects the distribution of a joint account. That’s because joint accounts answer to a higher authority—the joint account agreement. The same is true for life insurance benefits, which pass according to the beneficiary designation regardless of what the Will or Trust says. Same is true of joint accounts, which pass to the surviving account holder regardless of the Will or Trust.
There are times when a parent wants to leave a joint account to only one child. And there are times when they do not intend to do that. The problem is that those intentions are very rarely voiced or written down. Just what did mom and dad intend by naming only one child on a joint account? Opinions differ. The child with the money claims it was meant to pass to him only, and the other children disagree.
But the law assumes that a parent knows precisely what they are doing when they name a child as a joint account holder—not always true. The presumption is that the account was titled intentionally to include only one child to the exclusion of any other provisions in a Will or Trust. And it is up to the excluded children to prove otherwise.
What’s more, to prove a contrary intent (i.e., that mom and dad did NOT intend to leave the account to only one child), the law requires “clear and convincing evidence.” See Probate Code Section 5302(a). This is a higher evidentiary standard than we typically use in civil cases. Usually we employ a “preponderance of the evidence” test in civil cases, which means a certainty of 50% plus a little bit more. In criminal cases we use the well known “beyond a reasonable doubt” standard. Clear and convincing evidence requires more certainty than preponderence of the evidence, but less than beyond a reasonable doubt.
The best “clear and convincing” evidence would be writing from the parent who created the account saying “I am doing this only for convenience, not because I intend to leave everything to one child.” That type of writing rarely occurs. Instead, there is usually a mix of claims, allegations, and supposed statements from the parent. That leaves the stiffed children scrambling to find the evidence necessary to overturn the joint account. And that evidence isn’t searched out until the one person who can clarify the situation is deceased—the parent.
If you are going to undo a joint account after death, be prepared to find evidence that is both clear and convincing. It’s not impossible, but it takes a bit more digging than normal.