Joint Accounts — What Law Governs?

The issue in Barboza v. McLeod, 853 N.E.2d 192 (Mass. 2006) was “whether the law of a joint account’s situs governs ownership of the proceeds of the joint bank account, where the decedent established the joint account in [California] and died in Massachusetts.”  Helen M. Zaborowski, the deceased, had a joint bank account with her nephew, the defendant Andrew McLeod. Upon her death, McLeod withdrew the funds and closed the account. Stanley Barboza, Helen’s brother and Robert Barboza, her son, were administrators of the her estate.  They sued McLeod, saying that under Massachusetts law, the funds belonged to the estate.

Under California law,”[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent.” Cal. Prob.Code § 5302(a)

The Massachusetts court concluded that:

California law applies to determine whether the proceeds of the joint account are nonprobate assets belonging to the defendant, that the plaintiffs have failed to establish by clear and convincing evidence that the decedent did not intend the proceeds of the joint account to go to the defendant on her death, and that the judge erred in admitting certain evidence, we vacate judgment for the plaintiffs and dismiss the underlying complaint.

In addition to citing a number of other jurisdictions that look to the law of the situs rather than the residence at the time of death, the court said that 

California has a substantial interest in ensuring the proper adjudication of joint accounts opened within its borders. Moreover, the record in this case supports the inference that the decedent intended the account to be subjected to the benefits and burdens of California law. Based on the documents and testimony submitted it is clear that, up until her death, the decedent retained her mental acuity, lived independently, and ably managed her personal affairs. Until her death, she continued diligently to maintain the account in California.