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Rights of Joint Account Holders

Joint-accountSome people do not know the legal effect of adding someone as a signer on a bank account.

Arizona’s rule is simple.  When there are two or more people listed as signers or owners on a bank account, everyone on the account has survivorship rights unless the account says otherwise.  See A.R.S. §§ 14-6212(A), (C).  When property is owned under a right of survivorship, the surviving owner automatically receives the dying owner’s share of the property.  To avoid this automatic or default rule, the account must specify that it is not with right of survivorship.

For example, in In re Elizabeth J. Scozzari Trust, Gerald Scozzari was sued by his siblings to return money he received from a joint bank account with his mother and to remove him as trustee.  The trial court ordered Gerald’s removal as trustee and ordered him to return the money. However, the appellate court reversed.  The appellate court reinstated Gerald as trustee and held Gerald was entitled to the money from the joint account.

Elizabeth Scozzari executed a will in 1988.  The will referenced a trust naming her son, Gerald, as trustee.  Elizabeth intended that all of her children share equally in her estate.  Thirteen years later, in May 2001, Elizabeth opened a new checking account and added Gerald on the account shortly after.  That account was linked to Elizabeth’s savings account at the same bank.

Elizabeth died in 2005.  At that time, there was about $75,000 in those accounts. Elizabeth contributed all of the $75,000, but the account did not say if there was a right of survivorship.

Three years later, in July 2008, Gerald’s siblings petitioned for an accounting and removal of Gerald as trustee.  As part of the accounting, Gerald claimed that the money in the joint accounts belonged to him.  However, Gerald’s siblings claimed the money belonged to the estate.

The court agreed with Gerald:  Both Gerald and Elizabeth’s names were on the checks, and Gerald was listed as a recipient on the bank statements.  The bank documents listed Gerald as a co-applicant, and there was no evidence Elizabeth’s accounts were without survivorship rights.  Since survivorship rights are automatic under Arizona law, unless the account specifically states otherwise, the court held that Gerald was automatically entitled to the balance of the funds remaining in the joint accounts at the time that Elizabeth died.  See In re Elizabeth J. Scozzari Trust, 2011 WL 4415843, (Ct. App., 2011)(unreported).

The moral of the story is simple.  Be sure what it means to add someone on your bank or other financial account in Arizona.  If the account does not specify otherwise, on the death of a party to the account, the surviving owner(s) is generally entitled to all of the funds.  As you can see from the Scozzari case, this rule overrides provisions in the person’s last will and testament or trust.

Also, while the owners to a joint account are living, each is entitled to the share of the money they contributed to the account, unless clear evidence shows otherwise.  Married couples are presumed to make equal contributions to bank accounts, in the absence of proof otherwise.

If you have any questions regarding joint or multiple party accounts in Arizona, please do not hesitate to contact us.

By Justin S. McKay, Esq., Berk Law Group, P.C.

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