When two people open a joint bank account in Rhode Island, and one
person dies, who takes the money?
The immediate guess is the survivor. But not so fast. The real answer
can be so complex that state Supreme Court justices recently remarked
that opening a joint bank account with survivorship rights in Rhode
Island is a surefire way to trigger a lawsuit.
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The jocular remark came in an April 3 decision intended to clear the
ambiguity from the law. The case, Robinson v. Delfino, ruled that joint
accounts do transfer to the surviving account holder.
The decision appeared to relieve the law of a colossal burden. No longer
would there be any question as to who was entitled to joint account
funds.
“When Robinson came out attorneys rejoiced,” said Bruce J. Bettigole, a
Providence lawyer who has written widely on estate planning.
But their enthusiasm was short-lived. Upon closer reading they noticed a
footnote to the decision stating that since it was clear the account was
not set up for convenience, the court would not consider whether joint
accounts could be established solely for this reason.
Three months later the convenience issue did come up. In Bielecki v.
Boissel, July 14, the court ruled that joint accounts could be set up
for convenience’s sake, with no attaching survivorship rights.
So where does that leave the Rhode Island law?
“We’re pretty much back to where we started from,” Bettigole said.
Back to the point in which many lawyers are advising clients to state
specifically in their wills where they want the money in their joint
accounts to go. This avoids confusion. Still, lawyers say joint
accounts have historically been among the most prevalent sources of
litigation in the state, principally because the law — as the Supreme
Court wrote in its Robinson ruling — has been “unpredictable and
inconsistent.”
Several factors made the law an easy target for litigation. One is that
in the past, those who wanted to show that the account was meant to be
passed to the survivor had to prove that he or she had a “present
interest” in it, meaning that he or she wrote checks, made deposits, or
took some other active role in its management.
This, lawyers say, opened the door to lawsuits because it was often
unclear what the intention of the deceased account holder was,
especially if it was not stated in a will.
The two new rulings clear some of the ambiguity. Because of Robinson v.
Delfino, surviving account holders will no longer have to prove they had
a present interest to take the money.
This much is welcome to attorneys. Though questions about joint accounts
remain, they say they are pleased that the present interest standard is
no longer an issue.
“There was a general thinking within the legal community that Delfino
was long overdueI think the law was such that it lent itself to
litigation,” said Brian Goldstein, a Providence lawyer who does estate
planning. “Instead of determining present interest, now it’s whether or
not (the) account was set up for convenience.”
Bettigole and others have suggested that state General Assembly could
enact some kind of legislation to clarify the statue. But until then,
the best way to ensure that a joint account is not accessed by the
surviving member may be to simply avoid putting someone else’s name on
it, some attorneys say. By instead making someone an agent of your
account, he or she may access the account but will cease to have control
over it upon your death.
But even with the advances in the law that came with the recent Supreme
Court decisions, it is still too early to tell if there will be fewer
court cases over joint bank accounts as a result, noted David Riedel,
head of the Probate and Trust committee of the Rhode Island Bar
Association.
Riedel noted that some attorneys hesitate to advise their clients to
specifically state in their wills that they want their joint accounts to
be passed on to survivors, for fear that their clients will forget about
the clause and open a joint account for convenience purposes.
