In Wexler v. Rich, 2012 Fla. App. LEXIS 2662 (Fla. 4th DCA 2/22/12), the Fourth District was presented with the question of whether a married couple established tenancy by the entirety bank accounts under the guidelines set forth in Beal Bank, SSB v. Almand & Associates, 780 So. 2d 45 (Fla. 2001).

FACTS:

Rich opened two single-party bank accounts in his own name at Bank United. Both accounts were subsequently converted into multi-party accounts with Miriam as a co-signer with a right of survivorship. Miriam and Rich told the bank employee that they wanted to open “joint accounts.” The employee inputted information into the bank’s computer and generated two new account forms. The bank’s forms contained a section entitled “Ownership of Account;” two of the options were “Multiple-Party Account” and “Multiple Party Account–Tenancy by the Entireties.” Another section of the forms, entitled “Beneficiary Designation,” contained various survivorship options. On each form, the bank employee checked the option designating the account as a “Multiple-Party” account, and not a “Multiple-Party Account–Tenancy by the Entireties.” As to the beneficiary designation, the bank employee checked the box designating each account as a “Multiple-Party Account with Right of Survivorship.” The bank employee made these selections because Miriam and Rich had told her that they wanted to open “joint accounts” and because they did not expressly request that either account be held in the form of a tenancy by the entirety. Rich and Miriam had never discussed tenancies by the entirety and Miriam was not familiar with the concept. Moreover, the bank employee did not discuss that form of ownership with the Riches. After they reviewed the agreements with the employee for accuracy, Rich and Miriam signed each form at the bottom.

Rich and Miriam subsequently closed both bank accounts and the checks were made payable to Rich. Miriam did not object to the checks in Rich’s name alone because she believed that either of them was free to withdraw funds from the account with the consent of the other. That same day, Rich and Miriam traveled to Floridian Community Bank where, with Miriam’s knowledge, Rich deposited the two checks into a newly created account which was titled in Rich’s name alone, with Miriam and the daughter as equal “pay on death” beneficiaries. Rich subsequently changed the ownership of the account to his revocable trust without Miriam’s knowledge or consent. Rich died three days later.

Upon Rich’s death, the entire balance of the account was withdrawn and made payable to his trust rather than being split equally between Miriam and the daughter. Miriam first learned that Rich had changed the title to the account a few days after his death. According to Miriam, she had never intended to waive her rights to the funds, but declined to object when they were transferred to the single-party account because she knew Rich was agitated and did not want to upset him, given his declining health. Judge Colin found that the Bank United accounts were tenancies by the entirety entitling Miriam to assert a claim over the funds in the possession of the revocable trust.

RULE & REASONING:

The appellate court, in reversing Judge Colin, reasoned in part:

“Beal Bank held that if a signature card made at the opening of a bank account did “not expressly disclaim the tenancy by the entireties form of ownership, a presumption arises that a bank account titled in the names of both spouses is held as a tenancy by the entireties as long as the account” is established consistent with the six characteristics of an entireties account. Beal Bank recognized that “an express designation on the signature card that the account is held as a tenancy by the entireties ends the inquiry as to the form of ownership,” so that there is no need to utilize a presumption to determine the nature of a bank account. Also, Beal Bank indicated that a signature card’s “express disclaimer that a tenancy by the entireties was not intended” was effective to establish the absence of an entireties account, assuming no fraud.

The Supreme Court identified two ways to expressly disclaim the entities account status; first, “an express statement signed by the depositor that a tenancy by the entireties was not intended, coupled with an express designation of another form of legal ownership” and second, “if the financial institution affirmatively provides the depositors with the option on the signature card to select a tenancy by the entireties among other options, and the depositors expressly select another form of ownership option of either a joint tenancy with right of survivorship or a tenancy in common.”

This case demonstrates the second type of express disclaimer contemplated by Beal Bank. Bank United provided the Riches with account agreements containing the option of a tenancy by the entireties, but that option was not selected. Rather, the agreements established joint tenancies with right of survivorship. The Riches signed the agreements after having had a chance to review them. When the Riches signed the account agreements, they expressly selected a form of account ownership other than a tenancy by the entireties, within the parameters set by the Supreme Court in Beal Bank.

The trial judge found no express disclaimer of tenancies by the entireties primarily because the bank employee did not discuss or explain the account ownership options with the Riches. As it applies to the mechanics of the bank-customer relationship in the opening of accounts, Beal Bank does not require a bank to explain the legal ramifications of the various account options. Only a handful of attorneys in Florida are able to describe the differences between a tenancy by the entireties bank account and a joint account with right of survivorship. The bank’s obligation is to clearly provide customers with the option of a tenancy by the entireties account, not to assist them in making a considered choice. To paraphrase the old proverb, a bank’s duty under Beal Bank is to lead the horse to water, not to make him drink it.”