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Interesting Developments In Inheritance Laws

My practice is limited to trials involving inheritance disputes including will contest, related property disputes and associated torts. To ask privately about a Texas litigation issue involving an inheritance dispute, click the big red button to go to our main site's contact page and ask a question privately.

Category: Joint Accounts

When Are You Dead For Probate Purposes, Part 3

Texas Bank Gives Money To Wrong Person

Joint account with right of survivorship

hands asking the help and hands saving the money(made from my images)

Bank is not Liable Says Texas Supreme Court

In what I consider a strange holding, the Texas Supreme Court ruled in 2015 that when a Texas bank gives money to wrong person, the bank may not be liable.

Facts

The case dealt with a joint account with right of survivorship. A husband and wife opened the account. The account was a joint account with right of survivorship meaning that when one died, the survivor owned the account. The account also had a pay on death clause that paid the money to two people equally when the
last of husband or wife died. When the bank heard that the husband died, they issued a check to the two pay on death beneficiaries instead of leaving the money in the account under the wife’s name. One of the pay on death beneficiaries (first) kept the money. The other one (second) put the money into an account for the wife. He also had a power of attorney for wife and demanded that the bank reimburse the wife for the money that had gone to the first one. The bank admitted the mistake and attempted, unsuccessfully, to get the money back from the first one. After the wife died, the executor of her estate (second) filed suit against the bank.

No Damages

A jury found that the bank breached its duty to wife but found that the wife suffered no damages. The trial court entered a judgment against the bank for the full amount given to the first one, called judgment notwithstanding the verdict, JNOV. The court of appeals upheld the judge’s JNOV. However, when the case went to the supreme court, they overturned it. The supreme court ruled that the estate suffered no damage because the one half of the original account would have gone to the first one if no changes had been made! This doesn’t address the issue of what would happen if the wife had all the money and decided to spend it or to put it into another account (as she had done after the funds were disbursed.) I don’t understand how the bank is not liable for giving depositor’s money away. There was no discussion of any constraint on the wife to use that money, to give it to someone else or to just go to Las Vegas and blow it. It was wife’s money! How could giving it to someone else not cause damages! The only way to justify this case is that the two pay on death beneficiaries were not relatives of the husband and wife and that if the bank had paid the money back to wife, it would have ended up in the account opened by the second beneficiary after the fact and he would get all of the money. There is no discussion of these issues or what the wife’s wishes were. There is a brief mention of a guardian for wife but not discussion of what wife wanted done with the money.
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A Business Partner Receives Life Insurance Proceeds to Buy a Deceased Partner’s Interest but Keeps the Money.

Who gets insurance proceeds in Texas when a partner dies

Insurance Policy for Partner

In a 2014 case out of the Tyler Court of Appeals, the court decided a case involving life insurance proceeds between partners. Two men were partners in a business. They obtained life insurance policies on each others life for $2,000,000.00. When one
partner died, the other partner decided to keep the two million dollars. The family of the deceased partner filed suit alleging that the life insurance policy was meant to go to the family of the deceased to buy out his interest in the company. The trial court ruled in favor of the living partner. The family appealed.

Who Owns the Life Insurance Proceeds

After reviewing the facts, the court of appeals agreed with the trial court and ruled against the family of the deceased partner. They noted that while there were discussions about the money being used to buy out the family, there was never any contract to do so. Even though the deceased partner may have had a subjective belief that the proceeds of the insurance policy would be given to his family, his state of mind was insufficient to show a valid contract. Since the living partner was the sole beneficiary under the insurance policy, he kept all the money. 12-12-00150-CV.

What Should Have Been Done

The family of the deceased partner believed that the partners had agreed to pay for the insurance policy to protect the family of a partner who died. Just because they believed that didn’t create a contract where none existed. The partners should have entered into a written contract to protect their families. With this much money involved, the partners could have afforded a competent attorney who could have advised them on the proper way to achieve their goals.
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Can You be Sentenced to Prison if You Spend Money From a Joint Account?

Yes you can, says the Amarillo Court of Appeals in a 2013 case. The court noted that it is not often that civil and criminal precepts collide in a criminal prosecution but this one was one of those cases. A woman and her father-in-law opened… Continue reading

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We handle litigation involving inheritance disputes. We don't prepare wills. We handle a select few cases on contingency. Don't use a comment to ask a personal question about an inheritance issue because your name and comment will be public. To ask a litigation question and to protect your privacy, click the red button to the right.


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