A Guide for Challenging a Joint Account Arrangement in Michigan

Joint bank account arrangements are as useful as they are common, providing a simple means for transferring an individual's assets to others - either during his/her life or post death by operation of a survivorship designation - and the technique is commonly referred to as a "poor man's will." However, joint account arrangements may also be created for another reason altogether - convenience. By adding another party to a financial account, an individual can effectively and efficiently delegate the often time-consuming administrative tasks of check writing, bill paying, and the handling of other related financial matters. Significant legal problems can arise, however, when disputes exist regarding what kind of account arrangement was intended.

What is a Joint Account Arrangement? 

A joint account arrangement describes an account held at a bank, credit union, or financial institution in which two or more individuals are designated as account owners.1 This legal arrangement, commonly defined as a "joint account with rights of survivorship," has two fundamental attributes. First, in the absence of an agreement to the contrary, joint account owners are deemed2 to have equal ownership and access to the account's assets, each capable of withdrawing all of the account's assets.3 Second, the surviving individual receives sole ownership of the account's assets upon the passing of the other (unless a different death beneficiary designation has been made), without the need to probate the transfer of the assets.   

What is an Account of Convenience?     

By contrast, an account of convenience describes an arrangement whereby, for the convenience of the account owner, another individual is (or individuals are) added to the account and granted certain privileges. The exact extent of the privileges will depend upon the agreement of the parties. However, at the very least, the later-added individual(s) will have the ability to deposit and withdraw funds at the request of the account creator. For illustrative purposes, accounts of convenience are commonly used when an individual is infirm or lacks the capacity to handle routine finances. Although not required, a designation on a joint account may accompany the appointment of an individual(s) under a durable power of attorney. Under these arrangements, the later-added individual(s) is obligated not to exceed the scope of his/her authority with respect to access to the joint account and its assets.

Problems Have Arisen, Now What?         

While joint accounts may be useful from a practical point of view, the potential for serious problems regarding the intent of the joint account arrangement nonetheless exists. Most commonly, issues arise following significant events like the death or incapacity of the account creator, or a major withdrawal of funds by the individual later added to the account. For purposes of illustration, please consider the following example: Jane adds her son, Bill, to a bank account owned by Jane. Jane tells Bill and her daughter, Carol, that the purpose of adding Bill to her account is solely for "convenience" as Jane needs assistance paying bills. Jane also tells Bill and Carol, that upon Jane's death, she wants Bill to distribute the account balance equally to Bill and Carol. Following Jane's death, Bill disregards Jane's direction and instead withdrawals the remaining balance from the account. Although Bill as a joint account holder has the authority to withdraw the remaining balance of funds from the account, Carol has a cause of action against Bill as his actions are directly in contravention of Jane's direction. In such instances, questions of a later-added individual's entitlement (or lack thereof) to the account's assets arise, particularly if the joint account arrangement appears to substantially deviate from the comments or remarks made by the account creator or substantially deviates from prior iterations of an estate plan. When such disputes cannot be resolved through discussions, a need to legally challenge a joint account arrangement may exist.

Resolutions of disputes regarding a joint account arrangement need not always rise to the level of litigation. In the simplest manner, discussions with the account creator regarding his/her intent may adequately dispel any confusion. In this context, it may be advisable to have such discussions reduced to writing or, better yet, into an affidavit signed by the account creator, witnessed and notarized and filed with the financial institution and/or the account owner's estate planning attorney. 

Depending on the facts and circumstances, legal action - and, more specifically, a challenge to the joint account arrangement - may be justified. In many disputes, the account creator is either deceased or incapacitated - and, therefore, unable to resolve questions regarding his/her intent when creating the joint account arrangement. Even if there is input from the account creator, real disputes may still exist, especially in cases involving undue influence.

How Do I Legally Challenge a Joint Account Arrangement/Account of Convenience?

Like many areas of estate law, Michigan law provides significant guidance in resolving disputes over the entitlement and disposition of personal property, including assets held under a joint account arrangement. Under Michigan's joint ownership statute, MCL §487.703, a presumption exists that the property (and all additions thereto, including interest and capital appreciation), held in a joint account with the right of survivorship is, in the absence of fraud or undue influence, intended to vest in the surviving joint owner. As a result, the law presumes that the creator of a joint account arrangement intended for the later-added individual(s) to co-own all funds, regardless of the original source of the account's funds. Depending on the circumstances, this presumption may represent an actual deviation from the account creator's intent, particularly where an account of convenience was envisioned.

In order to overcome this presumption, those challenging a joint account arrangement must provide reasonably clear and persuasive evidence showing that the account creator intended to only create an account of convenience when setting up the joint account arrangement. Relevant evidence to satisfy this burden may come in the form of witness statements from bank employees or other individuals present at the time the joint account was created, notes and correspondence from the account creator, handwriting experts and the examination of account agreements and related documents, the account creator's other estate planning documents, or other banking and financial records. Individuals considering challenging a joint account arrangement should consider consulting with an attorney to discuss options and best practices to seek such records, including whether a subpoena or court order is necessary or advisable.  

An exception to the presumption described above exists when the individual(s) later added to a joint account serves in a fiduciary capacity to the account creator. In such a situation, the law actually presumes that the creator's intent was not to gift the other individual(s) with ownership or beneficial use of the account's assets. While the nature and extent of what constitutes a fiduciary relationship could take volumes to write about, the basic definition is a relationship of trust and confidence in which one party is entrusted and obligated to act for the benefit and best interest of the other. Examples of clear fiduciary relationships exist where an individual is a trustee under a trust, a personal representative under a will, an attorney in fact under a durable power of attorney, a guardian, and/or a conservator. However, fiduciary relationships, and the corresponding duties and obligations, may nonetheless arise from close relationships. With respect to accounts of convenience, individuals added to an account to assist the creator with his/her finances very well may owe a fiduciary duty. 

Those serving in a fiduciary capacity are not absolutely precluded from receiving gifts from his/her principal but must be mindful of the adverse presumption the law affords. As such, a fiduciary should be likewise prepared to defend one's entitlement to ownership in the joint account if the account creator intended the survivor to fully own the account. The same potential sources of evidence described above would be likewise relevant. 

If an individual has standing to challenge or seeks to confirm a joint account arrangement4, and provided such a claim is not time-barred5, a legal action may be commenced in the appropriate court. Most commonly, claims to challenge a joint account arrangement and/or to enforce its terms will be brought in the appropriate probate court, particularly if such claims are being asserted by a personal representative of a decedent seeking instruction from the court on whether and how to distribute a joint account's assets or by heirs of a decedent challenging a third-party's receipt of the joint account funds. In other situations, such as where a challenge to a joint account arrangement is being made while the account creator is alive and well, the circuit court may be the proper venue. In addition to issues such as standing and venue, consideration of a litigation plan or strategy should be made in advance of filing a claim. To this end, strategic motions, such as a motion for a preliminary injunction to freeze account assets, may be advisable in order to prevent the continued dissipation of a joint account's assets while the merits of a claim are being decided in court.

Depending on the circumstances, challenging or enforcing a joint account arrangement can be a complex and difficult process and, in such situations, the assistance of an experienced attorney is essential in order to provide you with the guidance, advice, and expertise required to properly challenge and/or enforce a joint account arrangement.

1 Specifically, a joint bank account, under MCL §487,703, exists where a deposit is made in any bank and "in form to be paid to either or the survivor of them," permitting the bank to pay the funds to either co-owner during their lifetimes and the survivor at the death of the co-owner.

2 Joint ownership of, and access to, an account and its assets has been affirmed by Michigan courts to exist during the parties' lifetime even when the account documentation does not expressly address survivorship rights of the parties. For example, see Danielson v Lazoski, 209 Mich App 623, 625-626 (1994) (citing Leib v Genesee Merchants Bank & Trust Co, 371 Mich 89, 95 (1963)).

3 With respect to lifetime gifting of funds, it is important to note the difference between joint "bank" accounts, such as a checking or savings account, and joint brokerage or money market accounts. Under a joint "bank" account, the gift is not complete until the added individual actually withdraws the funds; under a money market or brokerage account, which each irrevocably require joint signatures authorizing any withdrawal of funds, the legal gift occurs upon the naming of the added individual to the account.

4 Only certain parties will have legal standing to challenge and/or enforce a joint account arrangement. While not exhaustive, such a list would include those individuals named to a joint account, fiduciaries representing the account creator (such as a personal representative of a decedent's estate or conservator) and/or certain third-parties, such as the beneficiaries or heirs of a decedent named to a joint account.

5 Like most legal actions, claims must be asserted within a specific time period or they will be considered untimely and subject to dismissal. The period of time to assert a legal challenge to a joint account arrangement or the distribution of its assets will vary depending on the exact nature and circumstances of the claim itself. For example, if a challenge is being brought to address the actual distribution of a joint account's assets following the death of one of the account co-owners, a claim should be brought within the latter of (i) three years following the death of the decedent or (ii) one year after the asset's distribution. Other challenges may fall within the Michigan's general six year limitations period, requiring claims to be brought within six years of the claim's accrual. Given the complexity of determining the applicable limitations period, consulting legal counsel promptly is highly recommended.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Clark Hill PLC | Attorney Advertising

Written by:

Clark Hill PLC
Contact
more
less

Clark Hill PLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.