Skip to content

A Guide for Challenging a Joint Account Arrangement in Michigan

March 16, 2017

Joint bank account arrangements are as useful as they are common, providing a simple means for transferring an individual's assets to others – either during his/her life or post death by operation of a survivorship designation – and the technique is commonly referred to as a "poor man's will." However, joint account arrangements may also be created for another reason altogether – convenience. By adding another party to a financial account, an individual can effectively and efficiently delegate the often time-consuming administrative tasks of check writing, bill paying, and the handling of other related financial matters. Significant legal problems can arise, however, when disputes exist regarding what kind of account arrangement was intended.

What is a Joint Account Arrangement? 

A joint account arrangement describes an account held at a bank, credit union, or financial institution in which two or more individuals are designated as account owners.1 This legal arrangement, commonly defined as a "joint account with rights of survivorship," has two fundamental attributes. First, in the absence of an agreement to the contrary, joint account owners are deemed2 to have equal ownership and access to the account's assets, each capable of withdrawing all of the account's assets.3 Second, the surviving individual receives sole ownership of the account's assets upon the passing of the other (unless a different death beneficiary designation has been made), without the need to probate the transfer of the assets.   

What is an Account of Convenience?     

By contrast, an account of convenience describes an arrangement whereby, for the convenience of the account owner, another individual is (or individuals are) added to the account and granted certain privileges. The exact extent of the privileges will depend upon the agreement of the parties. However, at the very least, the later-added individual(s) will have the ability to deposit and withdraw funds at the request of the account creator. For illustrative purposes, accounts of convenience are commonly used when an individual is infirm or lacks the capacity to handle routine finances. Although not required, a designation on a joint account may accompany the appointment of an individual(s) under a durable power of attorney. Under these arrangements, the later-added individual(s) is obligated not to exceed the scope of his/her authority with respect to access to the joint account and its assets.

Problems Have Arisen, Now What?         

While joint accounts may be useful from a practical point of view, the potential for serious problems regarding the intent of the joint account arrangement nonetheless exists. Most commonly, issues arise following significant events like the death or incapacity of the account creator, or a major withdrawal of funds by the individual later added to the account. For purposes of illustration, please consider the following example: Jane adds her son, Bill, to a bank account owned by Jane. Jane tells Bill and her daughter, Carol, that the purpose of adding Bill to her account is solely for "convenience" as Jane needs assistance paying bills. Jane also tells Bill and Carol, that upon Jane's death, she wants Bill to distribute the account balance equally to Bill and Carol. Following Jane's death, Bill disregards Jane's direction and instead withdrawals the remaining balance from the account. Although Bill as a joint account holder has the authority to withdraw the remaining balance of funds from the account, Carol has a cause of action against Bill as his actions are directly in contravention of Jane's direction. In such instances, questions of a later-added individual's entitlement (or lack thereof) to the account's assets arise, particularly if the joint account arrangement appears to substantially deviate from the comments or remarks made by the account creator or substantially deviates from prior iterations of an estate plan. When such disputes cannot be resolved through discussions, a need to legally challenge a joint account arrangement may exist.

Resolutions of disputes regarding a joint account arrangement need not always rise to the level of litigation. In the simplest manner, discussions with the account creator regarding his/her intent may adequately dispel any confusion. In this context, it may be advisable to have such discussions reduced to writing or, better yet, into an affidavit signed by the account creator, witnessed and notarized and filed with the financial institution and/or the account owner's estate planning attorney. 

Depending on the facts and circumstances, legal action – and, more specifically, a challenge to the joint account arrangement – may be justified. In many disputes, the account creator is either deceased or incapacitated – and, therefore, unable to resolve questions regarding his/her intent when creating the joint account arrangement. Even if there is input from the account creator, real disputes may still exist, especially in cases involving undue influence.

How Do I Legally Challenge a Joint Account Arrangement/Account of Convenience?

Like many areas of estate law, Michigan law provides significant guidance in resolving disputes over the entitlement and disposition of personal property, including assets held under a joint account arrangement. Under Michigan's joint ownership statute, MCL §487.703, a presumption exists that the property (and all additions thereto, including interest and capital appreciation), held in a joint account with the right of survivorship is, in the absence of fraud or undue influence, intended to vest in the surviving joint owner. As a result, the law presumes that the creator of a joint account arrangement intended for the later-added individual(s) to co-own all funds, regardless of the original source of the account's funds. Depending on the circumstances, this presumption may represent an actual deviation from the account creator's intent, particularly where an account of convenience was envisioned.

In order to overcome this presumption, those challenging a joint account arrangement must provide reasonably clear and persuasive evidence showing that the account creator intended to only create an account of convenience when setting up the joint account arrangement. Relevant evidence to satisfy this burden may come in the form of witness statements from bank employees or other individuals present at the time the joint account was created, notes and correspondence from the account creator, handwriting experts and the examination of account agreements and related documents, the account creator's other estate planning documents, or other banking and financial records. Individuals considering challenging a joint account arrangement should consider consulting with an attorney to discuss options and best practices to seek such records, including whether a subpoena or court order is necessary or advisable.  

An exception to the presumption described above exists when the individual(s) later added to a joint account serves in a fiduciary capacity to the account creator. In such a situation, the law actually presumes that the creator's intent was not to gift the other individual(s) with ownership or beneficial use of the account's assets. While the nature and extent of what constitutes a fiduciary relationship could take volumes to write about, the basic definition is a relationship of trust and confidence in which one party is entrusted and obligated to act for the benefit and best interest of the other. Examples of clear fiduciary relationships exist where an individual is a trustee under a trust, a personal representative under a will, an attorney in fact under a durable power of attorney, a guardian, and/or a conservator. However, fiduciary relationships, and the corresponding duties and obligations, may nonetheless arise from close relationships. With respect to accounts of convenience, individuals added to an account to assist the creator with his/her finances very well may owe a fiduciary duty. 

Those serving in a fiduciary capacity are not absolutely precluded from receiving gifts from his/her principal but must be mindful of the adverse presumption the law affords. As such, a fiduciary should be likewise prepared to defend one's entitlement to ownership in the joint account if the account creator intended the survivor to fully own the account. The same potential sources of evidence described above would be likewise relevant. 

If an individual has standing to challenge or seeks to confirm a joint account arrangement4, and provided such a claim is not time-barred5, a legal action may be commenced in the appropriate court. Most commonly, claims to challenge a joint account arrangement and/or to enforce its terms will be brought in the appropriate probate court, particularly if such claims are being asserted by a personal representative of a decedent seeking instruction from the court on whether and how to distribute a joint account's assets or by heirs of a decedent challenging a third-party's receipt of the joint account funds. In other situations, such as where a challenge to a joint account arrangement is being made while the account creator is alive and well, the circuit court may be the proper venue. In addition to issues such as standing and venue, consideration of a litigation plan or strategy should be made in advance of filing a claim. To this end, strategic motions, such as a motion for a preliminary injunction to freeze account assets, may be advisable in order to prevent the continued dissipation of a joint account's assets while the merits of a claim are being decided in court.

Depending on the circumstances, challenging or enforcing a joint account arrangement can be a complex and difficult process and, in such situations, the assistance of an experienced attorney is essential in order to provide you with the guidance, advice, and expertise required to properly challenge and/or enforce a joint account arrangement. For a consultation with a Clark Hill attorney regarding a joint account arrangement matter, please contact Thomas E.F. Fabbri at (248) 988-5856 |, Mallory A. Kallabat at (248) 530-6342 |, Jonathan M. Martone at (248) 988-1823 |, Nicholas E. Papasifakis at (248) 530-9132 |, or another member of Clark Hill's Estate Planning & Probate Litigation practice group. For more information on probate related litigation matters, please visit our website at  


1 Specifically, a joint bank account, under MCL §487,703, exists where a deposit is made in any bank and "in form to be paid to either or the survivor of them," permitting the bank to pay the funds to either co-owner during their lifetimes and the survivor at the death of the co-owner.

2 Joint ownership of, and access to, an account and its assets has been affirmed by Michigan courts to exist during the parties' lifetime even when the account documentation does not expressly address survivorship rights of the parties. For example, see Danielson v Lazoski, 209 Mich App 623, 625-626 (1994) (citing Leib v Genesee Merchants Bank & Trust Co, 371 Mich 89, 95 (1963)).

3 With respect to lifetime gifting of funds, it is important to note the difference between joint "bank" accounts, such as a checking or savings account, and joint brokerage or money market accounts. Under a joint "bank" account, the gift is not complete until the added individual actually withdraws the funds; under a money market or brokerage account, which each irrevocably require joint signatures authorizing any withdrawal of funds, the legal gift occurs upon the naming of the added individual to the account.

4 Only certain parties will have legal standing to challenge and/or enforce a joint account arrangement. While not exhaustive, such a list would include those individuals named to a joint account, fiduciaries representing the account creator (such as a personal representative of a decedent's estate or conservator) and/or certain third-parties, such as the beneficiaries or heirs of a decedent named to a joint account.

5 Like most legal actions, claims must be asserted within a specific time period or they will be considered untimely and subject to dismissal. The period of time to assert a legal challenge to a joint account arrangement or the distribution of its assets will vary depending on the exact nature and circumstances of the claim itself. For example, if a challenge is being brought to address the actual distribution of a joint account's assets following the death of one of the account co-owners, a claim should be brought within the latter of (i) three years following the death of the decedent or (ii) one year after the asset's distribution. Other challenges may fall within the Michigan's general six year limitations period, requiring claims to be brought within six years of the claim's accrual. Given the complexity of determining the applicable limitations period, consulting legal counsel promptly is highly recommended. 

Subscribe For The Latest