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When Two Names Are on a Certificate of Deposit Who Gets the Money?

If a certificate of deposit shows both your name and another person’s name you may reasonably think that you each have equal right to the funds.  But what if the other person provided all the funds for the CD?

In Dupree v. PeoplesSouth Bank, No. 1180095 (Ala. May 8, 2020), the Alabama Supreme Court addressed this exact issue.

Jimmy Dupree deposited $100,000 with Peoples Community Bank and in return received a certificate of deposit in the names of “Brad Dupree and Jimmy Dupree”  (Brad Dupree being Jimmy’s son).  Brad was a minor at the time the CD was issued and did not contribute any money toward the purchase of the CD.  Brad and his mother were under the impression that the CD was intended as a sort of life insurance policy, and would provide for Brad in case anything happened to Jimmy or to Brad’s mother.

Many years after the CD was issued a dispute arose in the family, causing Brad, his mother, and his stepbrother to sue Jimmy for conversion (in other words, theft).  While the suit was pending Jimmy cashed in the CD without notifying Brad.  The Bank issued a cashier’s check payable to  “Jimmy Dupree or Brad Dupree” for the amount of the CD, less amounts set off by the Bank for a business loan Jimmy had at the Bank which was secured by the CD.   Jimmy kept the funds for himself.

In response, Brad sued the Bank for breach of contract and seeking restitution for the amount of the CD.  On appeal the Alabama Supreme Court found that Brad’s breach of contract claim failed because he had suffered no damages. 

You’re probably thinking, “how could that be?  He lost a $100,00.00 CD!”

The Court explained that whether Brad suffered any damages depended on whether he had an ownership interest in the CD or was otherwise entitled to any of its proceeds.  It may seem obvious to you that if Brad’s name was on the CD then he must have had some ownership rights in it.  However, under Alabama law “where two parties’ names appear on a CD and the funds used to purchase the CD belonged to one of the parties, unless there is evidence that the party whose funds were used to purchase the CD intended to make a gift or create a trust, the other party’s claim to the funds must fail.” Messer v. Kennedy, 574 So. 2d 788. 790 (Ala. 1991).

Brad did not contribute funds toward the purchase of the CD and was not a trustee over the funds, so the only way he could prevail was if he established that the CD was intended as a gift to him.

Brad, of course, testified that the CD was meant to be a gift, and his father’s testimony was to the contrary. The Court in analyzing whether the CD was a gift noted that: Jimmy had pledged the CD as collateral for a business loan; Jimmy received all interest payments on the CD and paid income tax on those gains; Jimmy never delivered the CD to Brad; and Jimmy testified that he put Brad’s name on the CD not as a gift, but only to ensure additional coverage under FDIC regulations for the funds he had on deposit with the Bank.

Brad (according to the Court) had no rights in the CD and therefore they concluded that he could not show that he was damaged when the Bank allowed Jimmy to cash out the funds. Without proof of damages his claim against the Bank failed and Jimmy kept all the money.

So, what can we learn from all of this?

One lesson that could be had is that record-keeping is important.  Perhaps the Court would have come to a different conclusion if Jimmy had signed a document at the time the CD was issued noting that he intended to gift the funds to Brad. Or, the investment could have been owned by a trust of which Brad was a beneficiary.

Litigation among  family members can get ugly. Do you need help unraveling a family investment dispute? Call the attorneys at Lewis, Lewis  & Falkner, LLC for your free consultation today, or make an appointment to come by our Tuscaloosa office.

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Whom Should I Appoint As My Healthcare Proxy or Agent?

Most people avoid thinking about their mortality as much as possible.  COVID-19, however, has pushed the topic into the spotlight and prompted many people to think about their end-of-life wishes.  But, deciding what kind of care you want to receive if you become seriously ill isn’t the end of the discussion.  You should also consider whether you want to appoint another person to help carry out your end-of-life wishes and/or make medical decisions for you if you become unable to do so.

There are two main ways to appoint another person to assist with your medical decision making:  (1) a Health Care Proxy designation in an Advance Directive; or (2) a Health Care Agent designation in a Power of Attorney for Healthcare.

Advance Directive – “Health Care Proxy”

An Advance Directive, also called a “living will,” is a document you can use to describe ahead of time the kind of medical care you would or would not want in certain end-of-life situations.  You can also use an Advance Directive to appoint a health care “proxy” – a person who can make end-of-life decisions and speak for you if you are too sick to speak for yourself. You can state in your directive whether you want your proxy to be able to make decisions about things that are not covered in the form, or if you want to give your proxy the power to make final decisions about your care, even if those decisions are different from what you chose in the advance directive.

Power of Attorney for Healthcare – “Health Care Agent”

A Power of Attorney for Healthcare also allows you to give another person authority over some of your medical care. Unlike an Advance Directive, however, a Power of Attorney for Healthcare is not limited to end-of-life situations. Instead, a medical Power of Attorney can give another person authority to hire and fire your doctors, consent to medical treatment beyond end-of-life care, access your medical records, and perform other tasks related to your healthcare.

An experienced attorney can combine the “living will” aspect of an Advance Directive with a Power of Attorney for Healthcare to give you a complete medical planning document that is tailored to your individual needs and wishes.  This combined document can cover both your end-of-life decision making as well as other aspects of your medical care.

What Kinds of Decisions Will My Proxy or Agent Make for Me?

It’s important to note that you do not lose your decision-making authority after you appoint a healthcare proxy or a healthcare agent. As long as you can communicate your wishes they will be honored.  It is only after you become unable to communicate your wishes that your proxy or agent will step in to speak on your behalf. 

Both an Advance Directive and a Power of Attorney for Healthcare can be written in such a way as to control the amount of authority given to your proxy or agent.

For example, your Advance Directive can direct that your proxy precisely follow your wishes as you outline them in your Advance Directive, essentially making the proxy your mouthpiece to enforce your end-of-life decisions and giving him or her no discretion at all.  On the other hand, a Power of Attorney for Healthcare can give your healthcare agent broader powers to make medical decisions on your behalf, even outside of end-of-life situations.   The Power of Attorney typically provides that your agent is allowed to make medical decisions – or certain kinds of medical decisions –  for you only if you are unable to communicate for yourself. Even then, your agent will be charged with aligning his or her decision with what you would choose for yourself if you were able to communicate.

Who Should I Appoint as My Proxy or Agent?

Regardless of how your Advance Directive or you Power of Attorney for Healthcare is drafted and how much latitude you give your proxy or agent in the document, you should carefully choose an adult who knows you well and whom you trust to serve in that role.  Many people choose a family member as their proxy and/or agent, but a close, trusted friend can also be a good choice.  Whomever you choose should live nearby or be able to travel to where you live if needed. You should not choose one of your doctors or other medical care providers or any of their relatives.

It is important that the person you name as your proxy and/or agent is be willing to accept the responsibility of serving in that role.

They should also be someone you feel comfortable discussing your healthcare priorities, your personal and spiritual values, and your end-of-life decisions with now.  The more information your proxy or agent has about what’s important to you regarding these medical decisions, the better job he or she can do in communicating your wishes to your medical providers. While having these discussions with the person you would like to appoint, you may discover that the potential proxy opposes your choices and therefore would not feel comfortable enforcing them for you.   Such a person would of course not be a good choice to serve your proxy or agent.

Your proxy or agent should also be someone you trust to handle conflicting opinions from other interested family and friends and to be a strong advocate for you if a doctor or medical institution is unresponsive. It is not uncommon for family members and friends to disagree about kind of care should be provided to a loved one.  Your proxy should be someone who is assertive enough to follow your wishes despite conflicts among other people who care about you.

In other words, because your proxy will be dealing with life or death choices, the person you select should be someone you quite literally trust with your life!

 

Alternate Proxy or Agent

You can also appoint a second person to serve as your “alternate” or “successor” proxy in your Advance Directive or agent in your Power of Attorney for Healthcare.  The alternate will step in if your first choice is unwilling or unable to act as your proxy or agent.

Are You Ready to Name a Healthcare Proxy or Agent?

Having an advance plan for your medical care is a valuable part of a complete estate plan, and can give you the peace of mind of knowing that your values and wishes will be honored.  You can also take comfort in knowing that your loved ones will have a written record of your wishes to guide them in the unfortunate event that you become too ill to communicate about your medical care.

Our attorneys are experienced in helping clients record their healthcare wishes via Advance Directives and Powers of Attorney for Healthcare.  Call our Tuscaloosa office at 205-553-5353 today to set up an appointment to discuss your options.  Nervous about leaving the house given the current pandemic?  Lewis, Lewis & Falkner can help you prepare your estate plan remotely in the safety and comfort of your own home.

Already have an estate plan, including an Advance Directive?  Now is a great time to review your documents and confirm that they still meet your needs.

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Estate Planning During the COVID-19 Pandemic

Recent events have prompted many people to consider the “what ifs” of serious illness.  What if you’re too ill to handle your business affairs?  What if you become unconscious and cannot communicate with your doctors?  What if you become so ill that you die?

None of us can predict the future, so we cannot know if or when we will become seriously ill or when we will die.  We can, however, do our best to prepare for those unfortunate events by doing things like crafting our estate plans.

Unfortunately, however, only about one third of Americans have any estate planning documents at all.  In a survey conducted by care.com, 23.9% of respondents had wills, and only 6.2% had advanced health care directives.

So, although most people recognize that there are lots of good reasons to have a will and a health care directive, they put off the task of creating those documents.

If you are one of those people who has been delaying the task of creating your estate plan, let us help eliminate some roadblocks for you:

  • COVID-19 Safety. COVID-19 may have you feeling the urgent need to get your estate plan put together, but you’re likely also nervous to venture out in public.  Fortunately, our attorneys can safely discuss your estate plan with you via telephone and videoconference.  Alabama is also currently allowing remote witnessing and notarization of documents, so right now it is possible to complete your estate plan without even leaving your house.
  • Expense. At Lewis, Lewis & Falkner we pride ourselves on making our rates affordable so that estate planning can be accessible to anyone.  We believe that every family deserves the peace of mind that comes from having a complete estate plan, so we keep our fees as low as possible.
  • Time. While some people have found themselves with lots of extra free time during the pandemic, many others have struggled with a lack of childcare and feel like there simply aren’t enough hours in the day.  Because we can arrange virtual meetings, we eliminate our clients’ drive time to our office. Technology also allows us to be flexible and adjust meeting times as our clients’ schedules change throughout the day, even conducting “meetings” outside of usual office hours. Draft documents can be emailed securely to clients for review. In other words, we work on our clients’ schedules to make the estate planning process as hassle-free as possible.

If you would like to give yourself some peace of mind by creating your estate plan – or by adding to or updating your current plan – please call our office today at 205-553-5353 to see how we can safely and conveniently help.  Basic estate planning documents are more affordable than you might think, and in some cases can be ready for your signature within hours.

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Using Your Last Will and Testament to Nominate a Guardian for Your Minor Child

Young parents often mistakenly believe that they do not need wills if they don’t own assets of significant value.  However, parents shouldn’t overlook the importance of protecting what’s most valuable to them – their children.

There are several ways that a valid last will and testament can provide protection for a minor child, one important example being that Alabama law allows parents to appoint a guardian for their minor child.

What is a Guardian?

A guardian is a person who has legal responsibility for a minor child in lieu of the child’s parents.  A guardian is appointed when a child’s parents are deceased or otherwise unable to care for the child.

When would an appointment of a guardian by will be helpful?

  1. First, if both parents die or become incapacitated;
  2. Or, if one parent dies and the surviving parent has no parental rights.

What Happens if I Don’t Name a Guardian in My Will?

If either of those situations arise and you have not nominated a guardian for your children in your will, then it will be up to the court system to select a guardian without your prior input.  In other words, you will be leaving the decision of who takes care of your children up to strangers.  Without your nomination to go on, there is a greater chance that the court will choose someone other than the person(s) you would have preferred.  While the court will do its best to select a guardian that is best for the child, you can help avoid the possibility that they get it wrong by simply memorializing your preference in your last will and testament.

Generally, the court will try to appoint a close relative of the child if the child’s parents have not nominated a guardian. But what if the person you prefer is not a blood relative of your child?  In that case it’s particularly important to record your wishes in a legal document because otherwise your top choice is unlikely to be chosen by the court.

Additionally, having the parents’ nomination of a guardian for their children recorded in their wills can help avoid conflict among the surviving family members.  Without your nomination to guide them, your child’s relatives will be free to speculate to the court about what you might have wanted.  This can lead to disagreements, hurt feelings, and even lengthy, expensive court battles over who should be appointed. Many parents try to avoid these kinds of conflicts by not only designating a guardian in their wills, but by also including in their wills their wishes concerning grandparent or other relative visitation. Another strategy that some parents use to prevent discord is to have open and honest conversations with their relatives about the nominations they have made in their wills soon after they sign them, or to leave with their wills a letter explaining their decisions.

What if My Child’s Other Parent and I Disagree About Who Should Be Appointed?

Parents often try to reach an agreement about who should take care of their minor children in the event they both die, but that’s not always the case.  What if each parent nominates a different guardian in his or her will?  In that case the will of the second parent to die has priority.

What if My Nominee Doesn’t Want to Be A Guardian?

There is a chance that despite your best efforts to carefully select a guardian, that person won’t be available or willing to serve when the time comes.  Your nominee could become mentally incompetent or too physically disabled to care for another person, could move out of the country, or could even predecease you.  Also, while many people are flattered and honored to be nominated as a child’s guardian, other people may not want that responsibility.  For these reasons it’s a good idea to name an alternate guardian (or several) as backup in case your first choice is unavailable.

What if I Change my Mind?

Circumstances change, families blend and separate, and so your perspective on who should be your children’s guardian may adjust over time. Just like any other aspect of your estate plan, you should review your guardianship nomination at least annually. A good estate planning attorney can help you efficiently revise your will to update your nomination if your preference ever changes.

Am I Guaranteed that the Person I Appoint Will be My Child’s Guardian?

Your nomination is given strong consideration, but the court will have final say. For example, if you nominate your mother as your child’s guardian, but she later develops dementia and is incapable of caring for herself, let alone a child, then a court will find another appropriate guardian for your child despite your nomination.  Or, if you appoint Bill Gates and Melinda Gates as your child’s guardians even though they are complete strangers to you and your child, the odds are that the appointment will not be accepted and a substitute will have to be found. So, it’s important to carefully consider who will be a good guardian for your child, who is likely to accept the appointment, and who your alternate nominees should be.

Why Else Do I Need a Will?

In addition to allowing you to nominate a guardian, your will can also protect your children by planning for their future financial needs.  Your will can be used to nominate a second person (other than his or her guardian) to be in charge of your child’s finances.  While it is common for one person to serve both of those roles, in some cases it makes sense to split the duties and have one person care for the child’s physical care while another one manages the child’s financial needs. Read more about why you need a will by clicking here.

Are You Ready to Work on Your Estate Plan?

The attorneys at Lewis, Lewis & Falkner are ready to help you plan for your future.  Call us at 205-553-5353 or stop by our downtown Tuscaloosa office to get started on your estate plan.

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The Top Three Reasons to Sign an Advance Directive for Health Care

An advance directive, also called a “living will,” is a document you can use to describe ahead of time the kind of medical care you would or would not want in certain situations.

You may wonder whether an advance directive is something you really need, especially if you are young and in good health.  Here are the top three reasons to talk to an attorney about an advance directive, regardless of your age or your health:

Creating an advance directive will prompt you to thoughtfully consider your end-of-life care.

End-of-life care is not something most of us think about very often. When people do think about those issues, though, they often realize that they have very strong opinions about what kind of care they would want in certain situations. Creating an advance directive forces you to give careful consideration to your wishes for your end-of-life care, something you may not otherwise do.

Creating an advance directive gives you an opportunity to discuss your wishes with your loved ones, caregivers, and doctors.

It’s hard to think about dying, and it can be even tougher to talk about it with the ones you love. Preparing an advance directive gives you a good opportunity to explain your end-of-life wishes to your family.

Talking to your family about the choices you make on your advance directive can make things easier for everyone later. When you explain your choices to your family while you’re still healthy you give everyone a chance to understand and accept your decisions without the added tension and pressure that may arise when you become ill.

Additionally, when you use an advance directive to make your wishes clear, you can avoid disagreements among your loved ones, or between your loved ones and your doctors. People are less likely to argue about your care later on if you have already had an open and frank discussion with them about the choices you have made on your directive.

Creating an advance directive gives you more say over how much treatment you will get should you become terminally ill or permanently unconscious.

This is the most obvious and biggest benefit to having an advance directive. If you become incapacitated and you do not have an advance directive, then Alabama law dictates who will make medical care decisions for you. The responsible person may not be who you would have chosen, or even worse that person may disagree with you about your healthcare choices.

In other words, creating an advance directive gives you the best possible chance of having your end-of-life healthcare wishes followed.

Working With an Attorney to Prepare your Advance Directive Is Easy and Inexpensive.

Advance Directives have lots of options and can be confusing (follow this link to learn more about Alabama advance directives). While you can sign an advance directive on your own it’s a good idea to have an attorney guide you through the process to be sure that your wishes are accurately stated. An advance directive is affordable and, just like any part of your estate plan, will give you valuable peace of mind.

Call our Tuscaloosa, Alabama office at 205-553-5353 today to set up an appointment with one of our attorneys to discuss your options.

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Lewis, Lewis & Falkner, LLC. | Attorneys at Law | 2224 15th Street Tuscaloosa, AL  35401
Phone: +205 553 5353 | Fax: +205 553 5593

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