In the Matter of the Estate of Aurelia DeFrank, the Superior Court of New Jersey, Chancery Division: Probate Part,MercerCounty, Docket No.: 09-01870, revolved itself about a dispute amongst the estate beneficiaries regarding the ownership of non-probate assets.
By way of background, the decedent died onAugust 18, 2009. She was widowed, but survived by two daughters. The decedent executed an original Will datedJuly 12, 1999, and a copy of a Will datedMarch 21, 2002. The latter Will was admitted to probate in formal form.
The decedent’s probate estate – which consisted of assets in the decedent’s name alone – totaled approximately $1,400,000 and was split between her two daughters in accordance with her Will. However, during her lifetime, the decedent also established thirteen (13) joints accounts with the one daughter and not for the other. The disputed joint accounts totaled $259,407.
A dispute developed between the daughters about ownership of the non-probate assets. The matter centered on the joint accounts which were subject to the Multiple-Party Deposit Act (the “MPDA”), N.J.S.A. 17:16I-1 et seq. The argument was that upon the decedent’s death the accounts became the joint owner’s sole property and not part of decedent’s estate. The counter-argument was that the joint owner shared a confidential relationship with the decedent and that the joint owner had to rebut the presumption of undue influence.
Generally speaking, joint accounts are governed by the MPDA. Absent an expression of a contrary intent in the deposit agreement, or other convincing evidence of a different intent at the time the account is created, a joint account is presumed to belong to the parties in proportion to the net contributions by each to the sums on deposit. However, a contrary presumption arises upon the death of a party to a joint account. Any sums remaining on deposit at the death of a party to a joint account belong to the surviving party.
To rebut the presumption that the joint account was an asset of the surviving joint owner, the challenger must show by clear and convincing evidence that a different intent existed at the time the account is created. In other words, the challenger must present evidence so clear, direct, and weighty and convincing as to enable a fact finder to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue. Aiello v. Knoll Golf Club, 64 N.J.Super. 156, 162 (App. Div.1960).
Otherwise, a party may also challenge the ownership by the surviving party to a joint account by showing that the survivor had a confidential relationship with the party who established the account. A confidential relationship encompasses all relationships ‘whether legal, natural or conventional in their origin, in which confidence is naturally inspired, or, in fact, reasonably exists. Pascale v. Pascale, 113 N.J. 20, 34 (1988). A parent-child relationship is among the most typical of confidential relationships. However, family ties alone do not satisfy the evidentiary burden. If a confidential relationship exists then the burden then shifts to the survivor to prove with convincing clarity that the creation of the account was free of deception or undue influence and that the depositor understood the consequences of the transaction. In Re Estate of Penna, 322 N.J.Super. 417, 422 (App.Div.1999). Undue influence is that sort of influence that prevents the person over whom it is exerted from following the dictates of his own mind and will and accepting instead the domination and influence of another. Pascale v. Pascale, supra, 113 N.J. at 30. The type of dependency required to show a confidential relationship is mental, not physical. Chandler v. Hardgrove, 124 N.J.Eq. 516, 522 (1938).
**Sidenote: The presumption of undue influence in the context of a joint account does not require proof of a suspicious circumstance as is required in the context of a Will.
Here, the Court found that there was no evidence to support the position that the decedent was unaware of the consequences of establishing joint accounts. Additionally, with regard to the claim of undue influence, the Court ruled that there was a lack of evidence to raise the presumption of undue influence. Rather, the Court found that the decedent remained otherwise independent of her daughter and retained control over the joint accounts, and as such, a confidential relationship had not been established.
Accordingly, in conclusion, the Court rules that all the joint accounts passed outside of the probate estate and passed by survivorship to the decedent’s one daughter.