Other Matters

Multiple-Party Accounts -- Joint Account

In re Marriage of Case, 28 S.W.3d 154 (Tex. App.—Texarkana 2000, no pet.).

 

Husband inherited money from his father and opened a certificate of deposit with the funds. The CD was in the form “Husband or Wife.” Upon divorce, Wife claimed that she was entitled to half of the CD. The trial court agreed applying the general rule in divorce cases that when a spouse uses separate property to acquire property during the marriage and then takes title to that property in the names of both spouses, the presumption arises that the purchasing spouse intended to make a gift of one-half of the separate funds to the other spouse. Husband appealed.

The appellate court reversed. The court began by acknowledging that normally a presumption of gift of one-half of the property would arise when separate property is used to purchase property which is then held in the names of both spouses. However, in this case, Probate Code § 438 provides that a joint account belongs to the parties in proportion to the net contributions by each to the sums on deposit unless there is clear and convincing evidence of a different intent. This statute overrides the common law gift presumption with respect to bank accounts such as the CD. Accordingly, the principal amount of the CD remained Husband’s separate property.

Moral: Placing money in a joint account does not operate as a gift of one-half of the funds to the other party to the account unless there is clear and convincing evidence of an intent to do so.



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