News & Events

What’s Mine is Mine, and What’s Ours is Now Mine

The Tennessee Supreme Court has now determined that money withdrawn from a joint checking account and placed into a certificate of deposit in the name of only one of the spouses loses its status as entireties property.  In re Estate of Calvert Hugh Fletcher, No. M2015-01297-SC-R11-CV, filed 12/06/2017.

The Fletchers opened a joint checking account with rights of survivorship, not as tenants in common.  Either spouse was allowed to withdraw funds on the basis of their signature alone.  The husband withdrew $100,000 and obtained a $100,000 CD in his name; he pledged the CD as collateral for a line of credit, but he never used the credit.

The husband died.  The wife and her deceased husband’s children began the internecine battle over the CD.  The wife contended that the funds remained entireties property and passed to her by right of survivorship. The children asserted that the CD was part of the probate estate.

The Probate Court ruled that the CD was a probate estate asset.  The Court of Appeals reversed.  The Supreme Court granted the application for permission to appeal.

The Supreme Court noted the Arkansas approach, where the removal of funds from a joint account by one account owner destroys the other party’s interest in the funds and compared it to the Pennsylvania approach, which provides that neither side can unilaterally destroy the “true purpose” of the “estate by the entireties by attempting to convert it or a part of it, in bad faith, into an estate held in severalty.”

The Supreme Court noted that several jurisdictions followed each approach.  The Pennsylvania view protects the spouse’s interests in the funds, but, in the view of the Tennessee Supreme Court:

… the Arkansas approach reflects the better approach in light of our current banking environment.  When either spouse is authorized to withdraw funds from a joint bank account (as indicated on the signature card), this grant of authority reflects the basic trust a husband and wife have in each other.  Each spouse fully expects the other spouse to make regular withdrawals from the account without the need for approval by the non-withdrawing spouse in every transaction.  Under the Arkansas approach, the funds, once withdrawn, cease to be entireties property.  The legal status is clear, and all parties know their respective positions.

To my dear spouse:  what’s mine is still mine, and what’s currently ours in the joint account, will be soon mine if/when I become brave enough to move it to an account solely in my name … if you beat me to the bank, please remember who loves you best!


Authored by William R. O'Bryan, Jr.