Tennessee Supreme Court Clarifies Law Regarding Ownership Of Funds Withdrawn From A Joint Bank Account

Wednesday, December 6, 2017

The Tennessee Supreme Court has unanimously ruled that, when one spouse unilaterally withdraws money from a married couple’s joint bank account and places the funds in a certificate of deposit, the funds are no longer joint property and belong to the spouse to whom the certificate of deposit was issued.

In April 2012, Calvert Hugh Fletcher and his wife, Nelda Karene Fletcher, deposited funds in a joint checking account designated with a right of survivorship. The joint account card required only one signature to withdraw funds. Later, Mr. Fletcher withdrew $100,000 from the account and deposited the money in a certificate of deposit held only in his name. After he died, a dispute arose between Mrs. Fletcher and Mr. Fletcher’s children from a previous marriage regarding ownership of the certificate of deposit. The Putnam County Probate Court ruled that the funds belonged to the husband’s estate because the funds ceased to be joint property when withdrawn from the joint account. Mrs. Fletcher appealed, and the Court of Appeals ruled the funds belonged to her because the money could be directly traced to the joint account.

After reviewing cases from Tennessee and other states, the Supreme Court held that, once a husband or wife withdraws funds from a joint bank account held as tenants by the entirety, the funds cease to be held by the entirety. The Supreme Court found this approach provides the clarity and finality needed in the current banking environment, noting it would be difficult for a third party receiving funds to know the source of the money and if someone else has an ownership interest in the funds.

In an opinion authored by Justice Sharon G. Lee, the Court held that the certificate of deposit issued to Mr. Fletcher from money withdrawn from the couple’s joint bank account was owned by Mr. Fletcher at his death and, therefore, was not owned by Mrs. Fletcher, but became a part of Mr. Fletcher’s estate and passed under the terms of his will.

To read the unanimous opinion in In Re Estate of Calvert Hugh Fletcher, authored by Justice Sharon G. Lee, visit the Opinions section of TNCourts.gov.



Couple Launches Hat Company; Gives Part Of Proceeds To Public Schools

Olivia Connor was a resident in the local Project Inspire teacher residency program when she realized the need for more funding for Chattanooga's public schools so that students have every possible opportunity to learn inside and outside the classroom. She and her husband Ty came up with a creative, innovative way to add more funding to the Hamilton County Department of ... (click for more)

Chattanooga Police Department Sponsors Crime Prevention Training For Business Owners And Managers

The Chattanooga Police Department is sponsoring free crime prevention training primarily designed for business owners and managers who are interested in making their facility and employees as safe as possible. A nationally-accredited Crime Prevention specialist from the University of Tennessee’s Law Enforcement Innovation Center will cover the following topics during the four-hour ... (click for more)

Signal Facing Decisions On Expanding Commercial Area Past Albert Road, Mountain Community Center And Water Service

The design review committee (DRC) of the town of Signal Mountain is in the process of establishing standards for commercial buildings. In the meantime, developer Bob Elliott would like to buy property at the corner of Taft Highway and Albert Road. Albert Road has traditionally been where the commercial property ends. A number of residents in the neighborhood around that area are ... (click for more)

Initiative Launches In Support Of Signal Mountain’s Water System; Tennessee-American Says It Has Long Provided Clean Water To Signal

A citizen committee is urging Signal Mountain "to be vocal and choose local" in the imminent water department sale. The local group formed “Be Vocal. Choose Local.” after the town of Signal Mountain voted last May to initiate a Request for Proposals for the acquisition of its water department.  The committee urges the town to sell its water system to Walden’s Ridge Utility ... (click for more)

Legislators: Protect Our Students And Teachers

When students step into their classrooms, they are there to learn and prepare for their future. Our teachers serve to advance each student’s education and guide them towards success.  Educators have an additional responsibility: maintaining the trust and respect of their students by conducting themselves professionally and responsibly. The vast majority of our ... (click for more)

Roy Exum: The Saturday Funnies

Every day, without exception, I find a number of “treats” in my daily dose of email. These funnies, and other pertinent information, are sent to me by a myriad of “Internet Buddies” who I repay by sending out some of the funniest that I collect. Think of it as sort of a “co-op” for my readers to enjoy. When The Saturday Funnies began last summer, it was what I still think is ... (click for more)