5, 2017 Session Heard at Jackson
by Permission from the Court of Appeals Probate Court for
Putnam County No. 18589 Steven D. Qualls, Judge
husband and wife deposited funds in a joint checking account
designated with a right of survivorship. Later, the husband
withdrew most of the funds from the joint account and placed
the funds in a certificate of deposit issued solely in his
name. After the husband's death, a dispute arose between
his surviving spouse and his children from a previous
marriage regarding ownership of the certificate of deposit.
The trial court, relying on Mays v. Brighton Bank,
832 S.W.2d 347 (Tenn. Ct. App. 1992), held that the
certificate of deposit was an asset of the husband's
estate because the funds ceased to be entireties property
when withdrawn from the joint account. The Court of Appeals
reversed and, relying on In re Estate of Grass, No.
M2005-00641-COA-R3-CV, 2008 WL 2343068, at *1 (Tenn. Ct. App.
June 4, 2008), held that the certificate of deposit belonged
to the surviving spouse because the funds were impressed with
the entireties and could be traced to the joint account. We
hold that once funds are withdrawn from a bank account held
by a married couple as tenants by the entirety, the funds
cease to be entireties property. Accordingly, the certificate
of deposit issued to the husband from funds withdrawn from
the joint bank account belongs to his estate, not his
surviving spouse. We reverse the Court of Appeals and remand
to the trial court for further proceedings.
R. App. P. 11 Appeal by Permission; Judgment of the Court of
Appeals Reversed; Case Remanded
D. Fincher, Cookeville, Tennessee, for the appellants, Elaine
Fletcher, Janet L. Fletcher Brady, Richard H. Fletcher, and
Peter J. Fletcher.
Kenneth S. Williams, Cookeville, Tennessee, for the appellee,
Nelda Karene Fletcher.
Michael T. Harmon and Timothy L. Amos, Nashville, Tennessee,
for Amicus Curiae, Tennessee Bankers Association.
G. Lee, J., delivered the opinion of the court, in which
Jeffrey S. Bivins, C.J., and Cornelia A. Clark, Holly Kirby,
and Roger A. Page, JJ., joined.
G. LEE, JUSTICE
April 2012, Calvert Hugh Fletcher and his wife, Nelda Karene
Fletcher, refinanced their home and paid off a line of credit
secured by the home. They deposited most of the proceeds into
a newly-opened joint checking account with FSG Bank. The FSG
Bank account agreement designated the account as "JOINT
- WITH SURVIVORSHIP (and not as tenants in common)."
Funds could be withdrawn from the account based on the
signature of either Mr. or Mrs. Fletcher.
January 2013, Mr. Fletcher withdrew $100, 000 from the joint
checking account and obtained a $100, 000 certificate of
deposit solely in his name, issued by FSG Bank. The
certificate of deposit was pledged as security for a $100,
000 line of credit, although the line of credit was never
used. In February 2013, the FSG joint checking account was
Fletcher became ill in March 2013 and died on September 6,
2013. In his will, Mr. Fletcher bequeathed his tangible
personal property and effects to Mrs. Fletcher and left the
residuary estate to his four adult children from a prior
Fletcher filed the will for probate in the Putnam County
Probate Court and was appointed executrix for the estate.
Mrs. Fletcher filed an estate inventory with the court,
listing the certificate of deposit as a non-estate asset, and
later filed a petition asking the probate court to designate
the certificate of deposit as her separate marital property.
Mr. Fletcher's children maintained that the certificate
of deposit was estate property.
hearing to determine ownership of the certificate of deposit,
Mrs. Fletcher testified that in April 2012, she and Mr.
Fletcher opened a joint bank account in a money market fund
at FSG Bank with an initial deposit of $100, 415.73. Of these
funds, $89, 779.97 came from the refinancing of the mortgage
on their marital home, and the rest of the money came from
marital funds. Mrs. Fletcher said she knew Mr. Fletcher
intended to use the funds in the joint account for potential
future investments, but she did not agree for Mr. Fletcher to
transfer $100, 000 from the joint bank account into a
certificate of deposit issued solely in his name. Mrs.
Fletcher testified she did not know the funds had been
withdrawn until December 2013, when she spoke with a bank
officer to receive an update on the couple's accounts.
Fletcher admitted that she signed the joint account card that
provided only one signature was required for withdrawal of
funds. Mrs. Fletcher explained that she paid the family's
bills and that bank statements were mailed to the marital
home. Although her practice was to open and review the bank
statements, Mrs. Fletcher did not recall seeing a statement
evidencing a withdrawal in January 2013 of just over $100,
000 or a statement indicating that the joint account had been
closed in February 2013. Although Mrs. Fletcher knew that Mr.
Fletcher was investing in real estate and working to develop
Walden Villages subdivision when he became ill, she did not
try to prevent him from investing. Mrs. Fletcher testified
that she knew if he wanted to, Mr. Fletcher would use the
money from the refinance loan for investment purposes. When
asked if she would have agreed for Mr. Fletcher to withdraw
$100, 000 to purchase stock, Mrs. Fletcher acknowledged that
he probably would not have asked her because that was his
practice. Mrs. Fletcher agreed that she could have withdrawn
$100, 000 from the joint account but would not have done so.
Fletcher's daughter, Elaine Fletcher, testified that in
April 2013, her father asked her to assist Mrs. Fletcher in
repaying a loan. While at the Fletchers' home, Elaine
Fletcher saw a statement on the kitchen table for an account
only in her father's name containing $100, 000, which she
and Mrs. Fletcher discussed. Elaine Fletcher overheard Mrs.
Fletcher's side of a conversation with FSG Bank
Vice-President Howard Bilbrey. Elaine Fletcher also spoke
with Mr. Bilbrey, who told her that the money was in a
certificate of deposit and would be difficult to withdraw.
When Elaine Fletcher relayed this information to ...