Disputed Trust & Estate Bank Accounts | CA Probate Litigation

Determining actual ownership of bank accounts
after the death of a loved one can be challenging. There can be real differences in what the
parties to the accounts, the beneficiaries of a trust, and the heirs of an estate believe
and what they want. It is difficult at times to find a blueprint
in which to operate. A 2017 California Court of Appeal decision
(Higgins v. Higgins) helps to identify some basic guideposts for ownership determination. The case arose from a lawsuit brought by the
personal representative of an estate against a wife who agreed to hold funds in trust for
her husband’s stepmother. After her husband’s death she changed the
form of the accounts and used the funds for her own purposes. The Appellate Court concluded that the wife
held the funds in the accounts in trust for the stepmother and the transfer of the accounts
into her own name and use was a wrongful act supporting the imposition of a constructive
trust. It is not unusual that parties to bank accounts
have a “finders-keepers” approach to ownership of the accounts at the death of the accounts’
co-holder. The parties to an account have a present right
to payment in proportion to their contributions unless there is clear and convincing evidence
of a different intent. This can be a stumbling block in elder financial
abuse cases where there are disputes over whether an elder really intends to gift account
proceeds during her lifetime. The Higgins case makes clear that other than
join accounts, Totten trusts and P.O.D. accounts, “the death of any party to a multiparty
account has no effect on beneficial ownership of the account other than to transfer the
rights of the decedent as part of the decedent’s estate.” In other words, don’t just assume that a
party to a multiparty account receives all funds at the death of the other party. Such assumptions may lead to actions that
result in litigation. Like anything, facts and circumstances differ
and the conclusions that can be drawn are dependent on the particular facts of each
case. At Hackard Law we regularly represent clients
in estate and trust litigation throughout California, whether in Sacramento, Los Angeles,
Alameda, San Jose, or San Diego. You can reach us at 916 313-3030, and we’ll
be happy to talk with you. Thank you.

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