Mrs. Jones and her husband had three children: Barbara, David, and Walter. Mr. and Mrs. Jones had owned an investment account with Olde Discount Corporation (the “investment account”) as joint tenants with right of survivorship and, when Mr. Jones died in November 1998, Mrs. Jones became the sole owner.
According to the investment firm’s policy, when a joint owner dies, the joint account must be closed and the proceeds transferred to the owner’s estate or to a new account in the survivor’s name. Therefore, in December 1998 Mrs. Jones and her daughter Barbara (the defendant) met with an account representative, where they filled out an application naming Mrs. Jones as the “applicant” and Barbara as the “second party.” They checked the box marked “joint tenants with right of survivorship.”
Barbara had sold her home in northern New Jersey in 1998 and, in 1999, Barbara bought a new home in southern New Jersey. Mrs. Jones refused to contribute toward the purchase of the home, but she sold her own home and moved in with Barbara.
In 2013, Mrs. Jones’s health began to decline and she named Barbara as her agent under a power of attorney. Barbara later used that document to withdraw funds from her mother’s other accounts to pay Mrs. Jones’s expenses.
Mrs. Jones died in 2015, leaving a will that bequeathed her estate to her three children equally.
David filed a lawsuit challenging the distribution of funds from the investment account to Barbara. He claimed that, under the New Jersey Multiple-Party Deposit Account Act (“MPDAA”), the account was not a joint account with right of survivorship. He claimed that the investment account was a “convenience account” and, as such, should be distributed as part of the estate. David claimed that Barbara and Mrs. Jones had a “confidential relationship,” and that Barbara had exerted undue influence over her. He also claimed that Barbara wrongfully used other accounts, rather than the investment account, to pay her mother’s expenses.
At trial, the judge found that Mrs. Jones and Barbara were joint owners of the investment account, with a right of survivorship, and that under the MPDAA, those funds now belonged to Barbara. She also found that a confidential relationship had existed between Barbara and Mrs. Jones, but that there was no undue influence. Finally, the judge found no wrongdoing in Barbara’s use of Mrs. Jones’ other accounts to pay her mother’s expenses.
On appeal, the judge’s rulings were affirmed.
First, the Appellate Division examined the MPDAA, which provides that,
sums remaining on deposit at the death of a party to a joint account belong to the surviving party… as against the estate… unless there is clear and convincing evidence of a different intention at the time the account is created.
A “joint account” is defined under the statute as “an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship, and regardless whether the names of the parties are stated in the conjunctive or in the disjunctive.”
The appeals court agreed with the trial judge, who had concluded that Mrs. Jones’s Last Will and Testament leaving her estate to her children equally “did not override the independent and intervening step” in which Mrs. Jones designated Barbara as joint owner of the investment account, with a right of survivorship. Also noteworthy was the fact that Mrs. Jones’s account designation occurred when she was deciding to sell her home and move in with Barbara. In sum, the evidence supported the judge’s conclusion that, because the investment account was a joint account, the MPDAA dictates that it passed to Barbara on Mrs. Jones’s death.
Second, the court reviewed the undue influence claim. It began by recognizing that, under the Ostlund case, in addition to the MPDAA statutory determination of ownership, ownership of a joint account can be challenged by establishing that the person opening the account had a confidential relationship with the survivor; if a confidential relationship is found, the survivor must rebut the presumption of undue influence by clear and convincing evidence. Here, although the trial court had found that a confidential relationship existed between Barbara and Mrs. Jones, it rejected David’s claim that the judge had failed to require Barbara to rebut the presumption of undue influence clearly and convincingly. Mrs. Jones was active, independent, maintained her own banking, and made her own decisions regarding her finances, including her decision not to contribute to Barbara’s purchase of a home even though Mrs. Jones moved into that home with Barbara.
The appeals court also rejected David’s claim that the account should be considered part of Mrs. Jones’s estate because she established it as a “convenience” account. The appellate court noted that, under the Sadofski case, when a joint account is created for purposes of convenience to the depositor, the funds do not pass to the survivor upon the depositor’s death. However, the trial judge had found no evidence that the account was created, or ever used, as a convenience account. It was opened when Mrs. Jones was still living alone, before Barbara purchased her home, and before Mrs. Jones’s health had begun to decline. It found David’s claim that Mrs. Jones told him she intended it to be a convenience account lacked credibility. In fact, because the investment account required both account-holders’ signatures on special forms in order to withdraw funds, the judge had concluded that the account was “anything but convenient.”
Instead, as the trial court had concluded, when Mrs. Jones opened the account, she was already planning to move in with Barbara and live with her for the remainder of her life. Her decision to name Barbara as a joint account holder could have been done in recognition of Barbara’s sacrifices on Mrs. Jones’s behalf.
With regard to David’s claim that Barbara should have used the investment account, rather than Mrs. Jones’s other accounts, to pay for Mrs. Jones’s expenses, the appeals court agreed with the trial judge’s conclusion. There was no evidence that Barbara’s use of the other bank accounts abused her authority under the power of attorney, particularly because Mrs. Jones had used those same accounts to pay her own expenses when she first moved in with Barbara.
The case is attached here – In the Matter of the Estate of Erna M. Jones
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