Back in the 1990s, Mrs. Bivins, a widow from New York, lived near the Gables. She had two daughters, one who lived in New York with her husband, a doctor, and another, a single, working mom, a widow herself, who lived in West Miami with her two sons. The New York daughter and her husband visited Mrs. Bivins for two weeks each winter, staying at a nice hotel over on Key Biscayne, and the New York daughter would also call her mother once a week. As Mrs. Bivins grew older, she became “needier” in many ways, and her Florida daughter called her daily and responded personally to those needs when necessary.
Mrs. Bivins owned her near-Gables condo, she was on Social Security and, as a retired school teacher, received a pension. She also had several certificates of deposit and a checking account, all at a local bank.
When Mrs. Bivins died, the court admitted to probate the Will that she had signed many years before, in fact just after her husband died but before the husband of her Florida daughter passed away. She had not been to see a lawyer since she signed that old Will. The Will left everything in equal shares to the daughters.
Before Mrs. Bivins died, she was often in the bank. At times she was accompanied by her Florida daughter. During the latter years of Mrs. Bivins’ life the bank people thought it was good when the Florida daughter came with her, because Mrs. Bivins appeared to need her Florida daughter’s help more and more.
A day arrived when one of the bank clerks suggested to Mrs. Bivins that she put the Florida daughter “on her checking account and CDs, just in case you get sick and need some help.” Also, the clerk said, such ownership would “avoid probate.`” Brilliant idea, said Mrs. Bivins, signing the new customers’ agreements herself and then handing them to the Florida daughter to sign, who was with her at the time.
Then Mrs. Bivins died. Under the terms of Mrs. Bivins’ Will, the “probate estate,” consisting of tangible personal property and the condo went in equal shares to the two daughters. No problem. But the checking account and the CDs were another matter. They were in the names of both Mrs. Bivins and the Florida daughter.
The New York daughter asserted that surely it must have been for convenience only that her mother had put her sister on the accounts. After all, the Will said equal shares. The Florida daughter, on the other hand, said that their mother must have meant for the accounts to reward her for all the faithful work she had done in helping her mother over the years, especially during the last several years before her death. Furthermore, said the Florida daughter, Mrs. Bivins knew that the sons of the Florida daughter would soon be going to college and that, as a single, working mom, the Florida daughter was already stretched. But no one really knew what Mrs. Bivins meant to happen.
Two Florida statutes pretty much settle the matter. Section 655.79 of the Florida Statutes creates a presumption that, when an account is “in the names of two or more persons,” those persons “intended” that upon the death of any one of them all rights in the account vest in the surviving person or persons. That presumption, the statute goes on to say, “may only be overcome by proof of fraud or undue influence or clear and convincing proof of a contrary intent.” (Such proof has a very high threshold, but it can be met.) The presumption worked in favor of the Florida daughter and the bank paid her the balances.
There is such a bank account known as a “convenience account.” Under Section 655.80, a bank account other than a CD may be put in the name of the depositor and some other person, that other person being an agent, a party there at the “convenience” of the owner/depositor. At the owner/depositor’s death the balance is 100% payable to the personal representative of the depositor’s estate; that is, it becomes part of the probate estate and therefore subject to the decedent’s Will, if she had one, or the laws of intestacy, if she did not. The convenience-agent gets nothing from the account. A bank may not provide a “convenience account” option for a CD, however. Nevertheless, a CD owner may give another person a “power of attorney” in respect to the CD. At the CD owner’s death, the agency under the power of attorney expires, just as all agency arrangements generally do, and the CD becomes completely part of the owner’s probate estate. There was no convenience account and no power of attorney in Mrs. Bivins’ case.
Even though the present statutory scheme seems to have settled bank account matters like the Bivins case, many lawyers will suggest special clauses in the client’s Will that will expressly address the issue. If Mrs. Bivins had said in her Will that she really meant for the joint accounts to go all to her Florida daughter, then the serious rift between the two sisters probably would have been avoided – at least as far as a court challenge may have been concerned. But she also might have said a little more. For example, she could have said that she meant for the checking account and CDs to go completely to the Florida daughter, not out of a lack of love and affection for the New York daughter, but because of the care-burden that the Florida daughter had gracefully assumed and for college needs of that daughter’s sons. Maybe such a statement in the Will would not have been legally necessary for the Florida daughter to receive the accounts in full, but it might have avoided the hurt feelings.
(There are also “pay-on-death” bank accounts, sometimes known as “POD accounts,” available under Section 655.82 and, to contribute to the confusion, once upon at time in Florida there were accounts known as ITF accounts, meaning “in trust for” accounts. Florida law attempts to clarify that confusion between POD and ITF accounts with Section 655.825. We will address in a later post POD, ITF, and similar accounts that pay at the death of the owner to a named beneficiary, but give the beneficiary no rights over the account while the owner is living.
Finally, there are asset-protection issues created when accounts are owned by more than one person and accounts that are owned together by husband and wife only but those matters are beyond the scope of this post as well.)