Other Estate Planning Matters

Joint Accounts

A.G. Edwards & Sons, Inc. v. Beyer, 170 S.W.3d 684 (Tex. App.—El Paso 2005),

aff'd in part, A.G. Edwards & Sons, Inc. v. Beyer, 235 S.W.3d 704 (Tex. 2007).


Father and Daughter established a joint account with rights of survivorship. For tax reasons, the account was converted into a single party account in Father’s name. Later, Father told Broker over the telephone that he wanted Daughter’s name added back to the account. Broker prepared documents reflecting the change and delivered them to Daughter who then gave them to Father who signed them. Daughter left the documents with Broker’s receptionist. Later, Broker could not locate the new joint account agreement despite a diligent search. Before father could sign a replacement agreement, he lapsed into a coma and died. A dispute arose over whether the balance of the funds in the account, over $1 million, belonged to Daughter or passed to Father’s six children by intestacy. Daughter settled the dispute with her siblings by agreeing to share the account equally with them.

Daughter then sued Brokerage Firm for the difference between the balance in the account and the one-sixth share she received. The jury determined that Brokerage Firm was liable under six theories. Daughter elected to recover under contract. Brokerage Firm appealed.

The appellate court affirmed. Brokerage Firm argued that the trial court improperly admitted extrinsic evidence of Father’s intent for the account to have the survivorship feature. The court recognized that Texas courts consistently hold that in the absence of a written agreement described in Probate Code § 439(a), extrinsic evidence is inadmissible to prove rights of survivorship against the depositor’s estate. See Stauffer v. Henderson, 801 S.W.2d 858 (Tex. 1990). However, Daughter was not seeking a recovery from Father’s estate or against a party to the joint account. Instead, she was attempting to recover from Brokerage Firm for losing the survivorship agreement thereby breaching its contract with Daughter and Father to create a joint account with rights of survivorship.

The court also held that (1) the parol evidence rule did not bar the admission of the extrinsic evidence, (2) Daughter’s agreement with her siblings did not act to waive her contract claim against Brokerage Firm, and (3) the trial court’s award of appellate fees should have been made contingent on an unsuccessful appeal by Brokerage Firm.

Moral: Although the survivorship feature of a joint account may not be established by extrinsic evidence to claim the funds in the account itself, such evidence may be used to show the depositor’s intent in an action against the financial institution.