According to N.J.S.A. §17:16I-5 (a), when there are multiple owners of a bank account, the law presumes the account to be jointly owned amongst the owners with a right of survivorship. “Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created.” Id. Case law carves out two different ways to rebut the presumption, which would cause the estate of the joint owner to get the funds in that account and not have that account pass to the joint owner.
The first analysis a challenger could use is by proving there was undue influence used to create the joint account. In re Estate of DeFrank, 433 N.J. Super. 258, 267–68 (App. Div. 2013). A presumption of undue influence in creating a joint account exists when the challenger proves that a “confidential relationship” existed between the person who created the account and the now deceased person. If that confidential relationship is proven, the court would require the creator of the account to prove that he or she did not unduly influence the deceased person into creating the joint account. Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 401 (App. Div. 2007). Familial relationships alone do not qualify, but parent child relationships are considered the “most natural of confidential relationships.” Pascale v. Pascale, 113 N.J. 20, 34 (1988). Thus, a daughter with a very close relationship with her mother, becomes her mother’s power of attorney and executor of her will, and assists on multiple occasions with her mother’s bills, would be enough to conclude a confidential relationship was formed, requiring the daughter to prove she didn’t unduly influence her mother in setting up the account in that fashion. DeFrank, 433 N.J. Super. at 270.
So what if you can’t show a confidential relationship or undue influence? Our next blog will discuss some alternatives.
If you are looking for additional details on this topic or if you require advice about your situation, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
Written by Stephen W. Kornas, Esq. of Hanlon Niemann & Wright