Bank of America, N.A. v. Eisenhauer, 474 S.W.3d 264 (Tex. 2015).

Other Estate Planning Issues

Multiple-Party Accounts


Husband and Wife opened a joint account with survivorship rights that also named two pay on death beneficiaries upon the death of the last joint owner. After Husband died, Beneficiary One closed the account even though Wife was still alive. Bank issued equal checks to Beneficiary One and Beneficiary Two. Beneficiary Two realized that this was incorrect so he used the power of attorney he had for Wife and deposited the funds into a new account in Wife’s name with himself as the pay on death beneficiary. Beneficiary One kept the funds she improperly received from the account.


After Wife died, Beneficiary Two became Wife’s executor and sued Bank for the money it improperly distributed to Beneficiary One. The jury found that Bank failed to comply with the deposit agreement but that the estate suffered no damages. The court granted Beneficiary Two’s request for a judgment notwithstanding the verdict and the appellate court affirmed.


The Texas Supreme Court reversed without even hearing oral arguments. The court explained that neither Wife nor her estate lost anything when Beneficiary One received half of the account funds. The account was a non-probate asset and none of the funds would have been in the estate even if the account had remained open until Wife’s death.


Moral:  The personal representative of a decedent who opened a multiple-party account which would transfer the money outside of probate lacks the ability to recover for breach of that contract because none of the funds would be in the decedent’s estate whether or not the contract was breached.