Estate Disputes: Joint Accounts and the Importance of Clear Intentions

Estate planning is meant to ensure a person’s wishes are respected after they pass away, but what happens when the intentions of the deceased become unclear? Sherman Estate v. Donovan, highlights how disputes between family members and executors can arise over the division of assets, especially when there is confusion about joint accounts and the testator's intent. This case sheds light on how courts handle such disputes and the responsibilities of executors in ensuring the estate is properly administered.

Note this article provides legal information, not legal advice. Reading this article should not be construed as obtaining legal advice from Ross Estate Law.

The Dispute: Who Gets What?

The case centers around a testator who divided his estate into two parts. Half of his estate was to be shared equally among his three adult children—A, B, and P—while the other half was to be divided among his eight grandchildren. P, one of the children, was appointed as the executor and estate trustee to manage the division of the estate.

However, a dispute emerged when A and B, the other children, brought a lawsuit against P. They claimed that P failed to include certain assets in the estate that should have been part of the division. Specifically, they were concerned about several assets held in joint accounts between the testator and P. P, the executor, argued that these joint accounts were not part of the estate because of the right of survivorship. According to P, the testator had intended for these assets to pass directly to her upon his death.

The Court’s Decision at Trial

At trial, the judge evaluated the situation and ruled that P’s argument lacked sufficient evidence. The judge found that there was no compelling proof to support the claim that the testator intended to gift the contents of the joint accounts to P. As a result, the judge ordered that the joint bank account and joint investments should be included in the estate, to be divided according to the testator's instructions. P, unsatisfied with the decision, appealed the ruling.

The Appeal and Final Judgment

P’s appeal was dismissed by the higher court. The main issue on appeal was whether the trial judge had failed to properly consider all the relevant evidence, particularly the financial documents related to the joint accounts. These documents included the right of survivorship clause, which would typically mean the account passes to the surviving joint holder.

The appellate court ruled that despite the presence of these documents, there was insufficient evidence to counter the presumption of a resulting trust. This presumption suggests that joint accounts are not automatically considered gifts unless clear intent is demonstrated. The court found that the banking documents did not explicitly state that the testator intended to gift the joint account assets to P, and the executor’s testimony was inconsistent and unreliable. As a result, the court sided with the trial judge’s decision and finalized the inclusion of the assets in the estate.

Please note that the information provided in this blog post is for general informational purposes only and is not intended as legal advice. Reading this post does not create an attorney-client relationship, and the information shared here should not be relied upon as a substitute for professional legal counsel. If you require personalized legal advice regarding estate planning or any related matters, we encourage you to schedule a consultation with Ross Estate Law to discuss your unique circumstances.