YOUR PRIVACY IS IMPORTANT TO US.

In a case decided in 2005, a man had an account at a financial institution.  He originally opened the account as a joint account with right of survivorship with his daughter.  That means that he and his daughter were joint owners and when the first one died, the account would belong to the survivor without passing through the estate of the one to die.

The man and his daughter later changed the account for tax purposes.  They made the account the sole account of the man.  When the man became ill, he wanted to change the account back to a joint account with right of survivorship with his daughter.  He contacted the institution.  He told them what he wanted to do.  The representative told the man that he would prepare the paper work and that someone could pick it up.  Once the man signed the paperwork, it should be returned to the institution.  The daughter picked up the documents, the man signed them then the daughter took them back to the representative.  The representative had left for the day so the daughter left them with his secretary.  Some of the documents made it to the right place but some did not.  The daughter started writing checks on the account which the institution processed.  The institution issued statements showing the account as a joint account with right of survivorship listing the man and his daughter.

Several weeks after her father’s death, the daughter asked the institution to close the account and open a new one in her name only.  At that time, the institution said that it could not find all of the paperwork and froze the account.  It then filed suit telling the court that it did not know who owned the money.  It added all of the man’s children as parties to the suit.  Because the paperwork could not be found, the daughter entered into a settlement with her five siblings splitting the money equally.

The daughter sued the financial institution for the difference between the money that she would have gotten had they properly changed the account to a joint account with right of survivorship and the money that she actually received, i.e. 1/6th of the account.  After hearing all of the evidence, the jury agreed with the daughter and entered a verdict against the financial institution.  The appeals court upheld the verdict.

You should always confirm that your financial institution has your account set up the right way.  However, if you do everything that you are told to do and they don’t get the paperwork in the proper place, they might be liable for any loss by you.