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Can A Will Defeat A Joint Survivorship Account?

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In Placencia v. Strazicich, a California appellate court ruled that a decedent’s will can defeat the presumption of a right of survivorship to a joint tenancy account.

The Facts of Placencia v. Strazicich

Decedent, Ralph Placencia, held a joint account with right of survivorship with his daughter, Lisa.  The joint account was opened in 1985.  Lisa had no involvement in opening the account, and no involvement with the account during Decedent’s lifetime.  In 2009, Decedent died.  Decedent’s will, executed shortly before his death, stated:

Remove Lisa Strazicich as sole beneficiary of my Franklin Fund. I want the beneficiaries to be Lisa Strazicich, Stephanie A. Placencia and Tina R. Placencia, my three daughters. I want the Franklin Fund to be placed into my trust fund and then be used to pay off the mortgage of my home in Huntington Beach, CA.

Lisa did not relinquish the funds after Decedent’s death.  Instead, Lisa transferred the funds to an account in her name.  Lisa argued that the will did not defeat the terms of the survivorship account, and litigation ensued.

The trial court ruled that Decedent’s intent as expressed in his will trumped the survivorship designation of the account.  Lisa (the joint owner of the account) was ordered to account for the funds in the account to Decedent’s  trust.  Lisa appealed.

How are  Joint Accounts Treated Under The California Probate Code?

The California appellate court analyzed California Probate Code sections 5302 and 5303, part of the California Multiple-Party Accounts Law (CAMPAL).

Section 5302

Section 5302(a) provides that a joint account entails a right of survivorship ‘unless there is clear and convincing evidence of a different intent.’  The court noted that:

The commentary to that section makes clear that ‘the intention to negate survivorship may be shown to have existed after the time of creation of the account.

Section 5303

Section 5303 provides that “rights of survivorship are determined by the form of the account at the death of a party.”  The court notes that:

Once established, the terms of a multi-party account’ including joint tenancies, ‘can be changed only by one of the following methods,’ which generally require a party to file paperwork with the financial institution.

In this case, Decedent expressed the intent in his will to negate and defeat survivorship, but the form of the account included the right of survivorship, and Decedent did not use one of the methods listed in section 5303 to change the terms of the account.  The California appellate court framed the question as follows:

What  happens when the form of the account includes a right of survivorship, which was not altered by any of the methods listed in section 5303, but the decedent expressed an intent to negate survivorship before passing?  The key to harmonizing these statutes lies in the distinction between the express terms of the account and the beneficial interests in the account.

Terms v. Beneficial Interests In Joint Survivorship Accounts

To reach the answer the court distinguished between ownership of the beneficial interests in the account, and the terms of the account, stating:

We harmonize the two statutes by recognizing the explicit distinction drawn in CAMPAL between the actual ownership of the beneficial interests in the account, and the express terms of the account.  The distinction allows the court to honor the clear intent of the person who established the account while at the same time offering protection to the financial institution which holds the depository account.

In this case, the bank was correct when it gave Lisa the money in the account based on the account’s terms.  However, based upon the statements in Decedent’s will, which the court determined were clear and convincing evidence of Decedent’s intent, the beneficial owner of the account was Decedent’s estate.

Therefore, a Will can furnish evidence of an intent to negate and defeat survivorship terms of a joint account.  While “a will cannot change a right of survivorship as a testamentary act, it may, nonetheless, provide evidence of the account holder’s intent during his lifetime.”

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