Nipp v. Broumley, 285 S.W.3d 552 (Tex. App.—Waco 2009, no pet.).
Decedent, using her own funds, opened certificates of deposit in the
form “Decedent or Son.” Shortly before Decedent’s death as she was
entering hospice, Son cashed three CDs worth approximately $76,000.
Daughter claimed that the CDs were part of their mother’s (Decedent’s)
estate. The trial court held that Son owned the funds in the CD because
Son had the right to withdraw the funds.
The appellate court reversed. The court explained the right to withdraw
is very different from ownership rights. Each party to a joint account
has the right to withdraw the funds under Probate Code § 445. However,
ownership of account funds is based on a party’s net contributions under
Probate Code § 438(a) unless there is clear and convincing evidence to
the contrary.
Son claimed that Decedent had made a gift of the CDs to him during her
lifetime. The court examined the basic elements of an inter vivos gift
(present donative intent, delivery, and acceptance) and determined that
Decedent did not have the intent to make a gift of the funds even though
she allowed Son to use the CDs as collateral for loans. Decedent
retained control over the CDs, keeping them in a lock box in her home
until Son took them just days before her death, and never allowed Son to
withdraw any of the funds.
Moral: A person opening a joint account must be very certain to trust
the other party because regardless who owns the funds in the account,
any party can withdraw all of the funds.