Tuesday, July 26, 2005
When I discuss joint accounts (and other types of multiple-party accounts) with students in class or with attorneys at CLE presentations, I emphasize the importance of the estate planning attorney doing an inspection of all account agreements to make certain they reflect the client's intent. Attorneys admit that they do not do this for a variety of reasons such as the hassle, time, and subsequent fees. Instead, they rely on what the client tells them about the account. I warn about the folly of this approach relying on fact patterns as stated in cases or from other people's memories.
Well, today -- it happened to Margaret and me! We went into a local bank (which shall remain nameless) to open an account. Without asking us what type of ownership we wanted, the new accounts officer preselected "multiple-party account without right of survivorship." She then explained that this meant that when one of us dies, the other owns all funds in the account. I explained that this was incorrect and that instead the box next to "multiple-party account with right of survivorship" should be checked.
The clerk expressed dismay with my statement, insisted that I was incorrect, and explained that this box is only used if there we wanted to designate a person to own the account after we both died. I politely demanded that she redo the forms with the survivorship boxed checked and after checking with her supervisor, she did so. She then admitted that she had only been opening accounts for two weeks and that, "I learn something new every day."
I am concerned about all the accounts she opened in the past two weeks for individuals who really wanted the survivorship feature who now have non-survivorship accounts. I wonder if she will go back, locate the incorrect accounts, and call all the depositors back into the bank to executed new account contracts. I doubt it ----