Who Owns Items Bought with Money from a Joint Checking Account?

“Who owns what and how?” Those are always the first questions asked when evaluating estate assets. Personal property is generally not titled because it is usually clear who the owner of the item is. Chances are no one will be confused about the ownership of your shoes or watch. Real property and accounts, on the other hand, can easily be titled in the name of more than one person. One common way to do this is by creating a joint tenancy in the title to the property. A joint tenancy grants equal ownership of the property and gives the right of survivorship to the other tenants. The right of survivorship simply means that when one tenant dies, their share of the property is transferred to the surviving tenants. This transfer is automatic and divides the deceased tenant’s share in equal parts to the survivor(s).

It is not uncommon for married couples to have joint checking accounts – a joint tenancy in a bank account. Such accounts are likely used for household needs, vacations, bills, etc. If I go to work, earn money, deposit it in my bank account, withdraw it, and purchase something for myself, there is no doubt that I am the owner of whatever it was that I bought. However, what if I had purchased that same item with money I took out of my joint checking account with my spouse? Are we joint tenants in what I bought? In August, 2012, the Second District Court of Appeal addressed this issue in Connell v. Connell, 93 So.3d 1140 (Fla. 2d DCA 2012).

William P. Connell, an elderly gentleman, married a woman twenty-six years younger than him and then passed away a little over a year later. There was an ante-nuptial agreement which stipulated that all property acquired by Connell before or after the wedding belonged solely to him, and his wife could not make any claims to the property. Additionally, any joint property held during the marriage was to be considered joint property and the survivor was to succeed the entire interest. Connell, 93 So.3d at 1141-2. Mr. Connell and his new wife opened a joint checking account after the signing of the ante-nuptial agreement. The account was held as a joint tenancy with the right of survivorship. The account was funded mainly with Mr. Connell’s own, separate funds. Shortly before his death, Mr. Connell purchase a $58,350 Rolex using all of the funds currently in his joint checking account, $10,000 on his son’s credit card, $9,000 on his son’s friend’s credit card, and $205 cash from his wife’s wallet. The son and friend were repaid out of the joint checking account. He also purchased a ring. He purchased the ring using $2,386 of credit from the exchange of a ring his wife had paid for and $17,000 of funds from the joint checking. Mr. Connell wore both items every day and took great care in storing them. Upon the death of Mr. Connell, his son listed the watch and ring as estate assets in the inventory, but Mr. Connell’s wife refused to turn them over. The trial court determined that the Connells jointly owned the items because they were purchased with joint funds.

It has been held in Florida that when funds are withdrawn from a joint bank account, it severs the “joint nature of the [funds] and severs the right of survivorship.” Connell, 93 So.3d at 1144 (quoting Wexler v. Rich, 80So.3d 1097, 1100 (Fla. 4th DCA 2012)). So the Second District Court of Appeal reasoned that, when the money was withdrawn, the joint tenancy ended. Additionally, the Connell court held that it is “for whom” the items are purchased that is important. Connell, 93 So.3d at 1144. Both items were clearly purchased for the husband, who wore and cared for them. The final consideration by the Connell court was the intent to create a joint tenancy. The court, quoting Beal Bank, SSB v. Almand & Assocs., 780 So.2d 45, 53 (Fla. 2001), stated that four unities must be present to create a joint tenancy, “possession, interest, title and time.” Mr. Connell had control and ownership of the items, thus he had exclusive possession and use. This unity was not found in the facts of the case and thus the court declined to find a joint tenancy in the items. The court concluded that the watch and ring belonged to the estate since the wife had no claim to them as a joint tenant.

Purchasing personal property with funds from a joint checking account does not automatically vest a joint tenancy in that personal property. In fact, withdrawing funds from a joint account severs any of the legal rights associated with joint tenancy. Further, the inquiry into ownership of personal property should focus on for whom the property was purchased and whether the four unities of a joint tenancy were present at the time. This can be a complex inquiry that turns on the facts of each case.

If you or someone you know needs help determining ownership of assets held in a joint tenancy, the lawyers at Chepenik Trushin can help. Please do not hesitate to contact us.