As loved ones age, they usually require assistance with their everyday lives, including managing their money. Most people work around this by adding a family member to their account or setting it up as a convenience account. While both accomplish the same goal, they have slightly different impacts on the account and how it is treated after the original owner has passed.
The designation of convenience accounts comes from Section 655.80 of the Florida Statute. The statute allows an account’s owner (principal) to designate an agent. The agent is a person who has the authority to withdraw, deposit, and manage from the account while not assuming any of the account’s liabilities. The agent is only granted access to the funds and has no ownership of the account. The impact is that when the original owner dies, the agent’s authority is terminated, and the account is treated as only owned by the principal. This means the account will be governed by the owner’s wishes and estate plan. The real-world impact is that the family member helping the parent doesn’t get to keep the account after the owner dies. The leftover money will be divided according to the owner’s estate plan.
Meanwhile, with a joint bank account, the added individual now owns the account. This impacts several things, including how the account will be treated when one of the owners passes. In a joint account, when one owner passes away, the account passes to the surviving owner automatically and in the survivor’s name only. Florida Statute 655.79 states that unless there is some expressed writing in the opening or maintenance of the account, an account with joint owners will be presumed to be a joint account. This means if you intend to add someone to an account just to help out and not to have any ownership if chosen to be owned jointly, that added individual will now be an account owner. Section 655.79 has an exception to this presumption by “clear and convincing proof of a contrary intent.”
A 2023 decision from the Third District tested this exception in the case of Larkin V Mendez. The case revolved around a father adding his son, Grover, to a main checking account. Grover lived closest to his father, and that led to his being added to the checking account, making a now jointly owned account. The irony of this case was that the bank card that added Grover had a convenience account designation, but the father chose to add Grover outright. When the father eventually passed, the joint account was presumed to be joint under Florida law, and Grover was now the cash owner by operation of law. The account held over 300,000 at the time of the father’s passing. A suit was brought, and the opposing brother’s Florida estate planning lawyer argued against Grover on behalf of the father’s estate, claiming the checking account was one of connivence that should be governed and split between all remaining sons. The probate court and appeals court found in favor of the estate, and the account was deemed to be for convenience.
The case leaned heavily on testimony from the other sons and neighbors. They all claimed the father intended to always have the checking account split evenly. While Florida courts ruled in favor of the estate, by the time of the appeals ruling, Grover had liquidated the account, and nothing was left over. Larkin v Mendez did provide an example of how to overturn a presumption of a joint account, but with hindsight being 20/20, simply using a convenience account would have avoided the entire situation.
This just goes to show the importance of proper estate planning. Simply checking the wrong box can lead a family through a lengthy court battle for the inheritance that was intended to be split evenly. If you want to discuss your options for adding family members or loved ones to your account, please contact a Florida Estate Planning Attorney by clicking here.
