C Withdrawals from Jointly Owned Accounts

Policy

A withdrawal of money from a financial account titled to the customer by a joint account owner other than the owner’s spouse may be a transfer with uncompensated value.

The date of transfer is the date the funds were withdrawn or spent to make payments or purchases that were not for the benefit of the customer.

Exception:

Although funds held in a jointly owned account are considered the property of the customer, the customer has the opportunity to prove that the customer did not deposit some or all of the funds in the account.

A person who wants to rebut ownership of the funds in the account may present evidence to prove that all or part of the funds are the property of another person.  See MA705 I for more details.

If either the customer or the other owner can prove that the funds withdrawn were deposited into the account by the co-owner and did not belong to the customer, withdrawal of those funds is not considered a transfer.

Definitions

Proof

The customer must also provide all of the following:

·         Account records showing deposits and withdrawals for all months in which ownership is being rebutted;

·         Proof of the source and ownership of the deposits;

·         Account records or a statement from the financial institution showing that the customer’s portion of the funds have been removed from the account, and that the customer is no longer listed as an owner or signer. 

When the customer is rebutting account ownership, the customer and each other account owner must provide a written statement, under penalty of perjury, of all of the following:

·         Who owns the funds in the account;

·         Why there is a joint account;

·         Who has made deposits to and withdrawals from the account; and

·         How withdrawals have been spent.

NOTE      If the only other account holder is incompetent or a minor, the customer must provide a statement that meets these requirements from a person who was aware of the circumstances surrounding establishment of the account.

Legal Authority