Joint Accounts and Parental Abuse

By John O’Grady, O’Grady Law Group

Joint Account Money May Not Be Yours

Maria Higgins added her stepson, W. Clive Higgins, as the joint account holder on her checking and savings accounts. Later, Clive transferred some of Maria’s other accounts into accounts he owned with his wife, Lupe, holding them in trust for Maria. Clive then died, and Lupe put her name alone on the accounts. Upon Maria’s death, Lupe paid Maria’s funeral expenses and some of Maria’s estate bequests before using the remaining funds for herself and her own family.

Arthur Higgins, Maria’s executor and successor trustee, brought an action for constructive trust, claiming he’d been wrongfully deprived of his rights as trustee. The trial court ruled in Lupe’s favor on the theory that as the joint holder on Maria’s accounts, Clive had a legal right to use the funds as he pleased and was free to make Lupe a joint owner. The appellate court reversed, holding that as long as all parties are living, an account belongs to the parties with a present right to payment unless there is clear and convincing evidence of different intent. The evidence showed Clive and Lupe had intended to create irrevocable trust accounts for Maria. Because Lupe later repudiated the trust by removing Maria’s name from the accounts and using the funds herself, the appellate court found that Arthur was entitled to a constructive trust. Having your name on an account doesn’t always mean the money’s yours. An estate planning lawyer can help you and your clients to preserve relationships by clearly documenting who’s entitled to what when tragedy strikes. Higgins v. Higgins, California, Second District, Div. 5, B265865 (2017).

Adult Child Can’t Sue for Abuse of Parent

Belinda Tepper sued her siblings on behalf of her 88-year-old mother, Eileen Wilkins, claiming that their actions as individuals and as trustees of Eileen’s revocable living trust constituted financial elder abuse. Tepper was not herself a trustee, and she neither alleged she’d been personally aggrieved by her siblings’ actions nor positioned herself as Wilkins’ conservator or attorney-in-fact. Tepper’s siblings asserted that Tepper didn’t have legal standing to pursue an action on Wilkins’ behalf. Wilkins retained her own lawyer and sided with the siblings. Ultimately, the trial court sustained their demurrer without leave to amend and dismissed the case, and the court of appeal affirmed the ruling on the basis that Tepper lacked standing.

According to Probate Code Section 48, an “interested person” possesses an interest in the trust that may be affected by the proceeding. Tepper didn’t claim such an interest, and she wasn’t aggrieved by the alleged conduct. In other words, Wilkins, not Tepper, was the interested party in the elder abuse action. Because Tepper didn’t proceed as her mother’s conservator or guardian ad litem, she lacked standing to pursue the action and was held to be personally responsible for the costs incurred by her mother and siblings. Simply being a parent’s child is insufficient to confer standing. Know where thy client stands before initiating a costly lawsuit. Tepper v. Wilkins, California, Second District, Div. 7, B269900 (2017).

About the author:

John O’Grady leads a full service estate and trust law firm in San Francisco.  He served as a past Chair of BASF’s Estate Planning, Trust & Probate Section. His practice includes Estate Planning & Administration, Probate and Trust Litigation.