Estate and Elder Law

A Matter of Convenience: From Bank Accounts to Real Property

By John G. Farinacci

Estate litigators see a wide variety of disputed issues since the affairs of decedents are as diverse as the types of people they were during their lives. However, we also see many of the same or similar fact patterns.  One of these involves disputes over whether the addition of joint or co-owners to bank accounts were intended merely as a matter of convenience.

Section 675 of the Banking Law provides, in pertinent part, as follows:

(a) When a deposit of cash ... has been made ... in the name of [the] depositor ... and another person and in form to be paid or delivered to either, or the survivor of them, such deposit ... and any additions thereto made, by either of such persons ... shall become the property of such persons as joint tenants ... (b) The making of such deposit or the issuance of such shares in such form shall, in the absence of fraud or undue influence, be prima facie evidence, in any action or proceeding to which the banking organization, foreign banking corporation, surviving depositor or shareholder is a party, of the intention of both depositors or shareholders to create a joint tenancy and to vest title to such deposit or shares, and additions and accruals thereon, in such survivor. 

Where the form of the account is according to the foregoing section, it is presumed that the parties intended to create an account held in joint tenancy with the right of survivorship. Matter of Camarada, 63 A.D.2d 837 (4th Dep’t, 1978). The burden of rebutting that presumption is on the challenger, and he may prevail only by “direct proof or substantial circumstantial proof, clear and convincing and sufficient to support an inference that the joint account had been opened in that form as a matter of convenience” Id, at 838.

In Matter of Zorskas, 20 Misc.3d 1110[A] (Sur Ct, Nassau Co., 2008), the Nassau County Surrogate’s Court set forth factors (gleaned from several cases) to consider in determining whether a joint account is a convenience account or a true joint account:

                        (i)         whether the decedent was the sole depositor to the account;

                        (ii)        whether the creation of a survivorship interest would deviate                                          significantly from the decedent's testamentary plan (Matter of                                        Johnson, 7 A.D.3d 959 [3d Dep’t 2004]);                                     

                        (iii)       whether the account was used exclusively by the decedent during                                               his lifetime (Matter of Camarada, 63 A.D.2d);

                        (iv)       whether the decedent retained the right to withdraw the proceeds                                              (Matter of Niesz, NYLJ, Apr. 24, 1996, at 32, col 1 [Sur Ct,                                      Westchester County]); and

                        (v)        the conduct of the surviving joint tenant (Matter of Boyd, 186                                       A.D.2d 394 [1st Dep’t 1992]).

 

Upon consideration of such factors, if the party challenging the survivorship nature of the account prevails in proving the joint nature of the account was merely for convenience, the account will then pass as though part of decedent’s testamentary estate.

While the concept of convenience account challenges is relatively well known in the practice of estate litigation, less well known is the concept that co-ownership of real property may also be shown to have been for convenience. In such a case, equitable principles will have primacy over the formalities of actual title, as illustrated in the recent First Department decision in Ampratwum v. Appiah, 125 A.D.3d 513 (1st Dep’t 2015). There, the administrator of the estate of her deceased husband brought an action against decedent’s mother seeking to partition the mother’s residence based on the co-ownwerhip (as tenants-in-common) of decedent and his mother.

The Court in Ampratwum affirmed the lower court’s refusal to grant the partition. In so doing, the Court noted that:

[w]hile there is a presumption that tenants-in-common share equally in their common tenancy, such a presumption may be rebutted if the facts show that they hold the tenancy in unequal shares. A court acting in equity may take into account the amounts invested in the property by the respective tenants in determining the shares to which they are entitled. 

Id., at 513.

The Court found defendant’s undisputed testimony persuasive that she alone contributed the funds used to purchase the property and to maintain it; that she resided in the home since its purchase; that decedent never resided in the residence and that his name was put on the deed solely for defendant’s convenience.

Thus, as in the case with bank accounts, the formalities of title to real property creates presumptions that may be rebutted with sufficient proof of the parties’ intentions and a showing of the inequity of upholding those formalities.

Mr. Farinacci is a partner in Ruskin Moscou Faltischek's Trusts and Estates Department. He heavily concentrates his practice in trust and estate litigation, having successfully handled numerous contested cases in the New York State Surrogate's Court, Supreme Court, Supreme Court Appellate Division, Court of Appeals and Federal District Court. Mr. Farinacci also represents clients in estate planning, estate administration and guardianship matters.

Prior to joining RMF, Mr. Farinacci was a partner at a Long Island law firm, where he specialized in trust and estate matters. While in law school, Mr. Farinacci interned for the Nassau Surrogate's Court under Judge C. Raymond Radigan.

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