Franklin v. Anna National Bank

Appellate Court of Illinois
140 Ill. App. 3d 533, 488 N.E.2d 1117 (1986)

ELI5:

Rule of Law:

A party challenging the ownership of a surviving joint tenant in a bank account can overcome the presumption of donative intent by presenting clear and convincing evidence that the account was created solely for the convenience of the original owner. Evidence of the depositor's actions subsequent to the creation of the account is admissible to determine the depositor's intent at the time of creation.

Facts:

In April 1978, Frank A. Whitehead, who was losing his eyesight, had his sister-in-law, Cora Goddard, move in to care for him.
On April 17, 1978, Whitehead took Goddard to the bank and added her name to his savings account, which was previously a joint account with his deceased wife.
Whitehead stated he was adding Goddard's name so she could access money for them when needed and that he wanted her to have the money if she outlived him.
Goddard never deposited any of her own money into the account, made no withdrawals, and only possessed the passbook while living with Whitehead.
Later in 1978, Enola Stevens Franklin began to care for Whitehead.
In January 1979, nine months after adding Goddard, Whitehead sent two handwritten letters to the bank attempting to remove Goddard's name and add Franklin's as a joint tenant.
One letter specified the change was so Franklin could 'take care of my bill or sick' in case Whitehead could no longer see.
Whitehead died in December 1980 with Goddard's name still on the official bank signature card for the account.

Procedural Posture:

Enola Stevens Franklin, as executor of Frank A. Whitehead's estate, filed suit against Anna National Bank in the circuit court of Union County to recover funds from a joint savings account.
The bank filed an interpleader action, bringing in Cora Goddard, the surviving joint tenant, to assert her claim to the funds.
The trial court initially granted summary judgment in favor of Goddard.
Franklin, the executor, appealed to the appellate court, which reversed the summary judgment and remanded the case for a full trial.
Following a bench trial, the circuit court of Union County entered judgment for Goddard, finding her to be the sole owner of the funds by right of survivorship.
Franklin, as executor, appealed the trial court's judgment to the appellate court.

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Issue:

Does a decedent's estate overcome the presumption of donative intent for a joint bank account by presenting clear and convincing evidence that the decedent created the account for his own convenience and later attempted to remove the surviving joint tenant's name?

Opinions:

Majority - Justice Welch

Yes. The presumption of donative intent in a joint tenancy can be rebutted by clear and convincing evidence that the account was established primarily for the depositor's convenience. Although a joint tenancy agreement presumptively creates a right of survivorship, the form is not conclusive. The court found that events occurring after the account's creation were proper to consider in determining Whitehead's original intent. Whitehead's attempt to remove Goddard's name and substitute Franklin's only nine months later, combined with his written statement that the purpose was for assistance with bills if he became incapacitated, constituted clear and convincing evidence that he viewed the account as his own property and lacked the intent to make a present gift. Goddard's lack of control or contribution to the account further supported the conclusion that it was an account of convenience, not a true joint tenancy with donative intent.

Analysis:

This decision reinforces that the creation of a joint bank account is not an irrebuttable gift to the other signatory. It clarifies that a court can look beyond the four corners of the signature card to determine the depositor's true intent at the time of creation. The case is significant for allowing subsequent actions, such as attempts to change the account holder, to serve as powerful evidence of the original intent. This provides a clear avenue for estates to challenge survivorship rights in cases where an account was likely established as a practical tool for an ailing or elderly depositor, thereby preventing assets from being unintentionally diverted from the estate.

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