In 1992, the Maryland General Assembly created Financial Institutions Article § 1-204 to alter the common law treatment of joint and other multiple party accounts: “[FI § 1-204] is intended to alter the common law, including Whalen v. Milholland, 89 Md. 199, 43a.45 (1899), Milholland v. Whalen, 89 Md. 212, 43a.43 (1899) and their progeny, as it applies to all deposit accounts in financial institutions that are established in the name of one or more parties, whether or not in trust, or with survivorship rights, or with payable on death rights.” 1992 Md. Laws 3498, 3507 (CH. 578, H.B. 956).
Essentially, FI § 1-204 provides that upon the death of a party to a multi-party account, the right to the funds in the account “shall be determined in accordance with the express terms of the account agreement” and, unless the account agreement states otherwise, those funds shall belong to the other named parties to the account and that generally “no payment from a multi-party account may be made to the personal representative of the deceased” depositor. FI § 204(D). The statute, however, provides that the multi-party account does not include an account established with one or more “convenience persons” authorized to draw funds from the account. FI § 1-204(B)(8)(ii). A convenience person means a person who may draw funds from an account under a power of attorney or by virtue of the designation of the account agreement establishing such account. FI § 1-204(B)(5). In other words, other than an account specifically designated that it was established to create an agency or convenience relationship, all other multiple party accounts will go to the surviving co-owners or designated trust beneficiaries.
Financial Institutions § 1-201 provides that at the death of a party sums on deposit in a multiple party account “belong to the surviving party or parties.” This language is the same as the current version of the Uniform Probate Code § 6-212(A). Uniform Probate Code (2010). Earlier versions of the Uniform Probate Code, however, provided that the funds remaining in a joint account or multiple party account belong to the survivor, absent clear and convincing evidence that the deceased depositors had a contrary intent.[1] This earlier rule, of course, was the Maryland rule under the common law.[2] The Maryland and current Uniform Probate Code approach is seen as creating a conclusive presumption of ownership in the survivor if survivorship language is included in the account agreement. Gregory Eddington, “Survivorship Rights and Joint Bank Accounts: A Misbegotten Presumption of Intent,” 15 Marquette Elder’s Advisor, 175, 204-5 (2014)(“In jurisdictions that follow this approach, use of survivorship language conclusively establishes ownership in the survivor. Thus, the existence of survivorship language benefits co-tenants in these states more than in original Uniform Probate Code jurisdictions where co-tenants only get a presumption of survivorship. In that respect, those jurisdictions are even more favorable to claims of co-tenants than the old UPC rules. But the rules in these states vary regarding ownership when survivorship language is absent. In some states, the co-tenant must prove that survivorship was intended. In others, particularly in Maryland, Mississippi, and Missouri the presumption of survivorship is conclusive even if the account agreement uses only the term ‘joint’ or says that the funds are payable to ‘any’ of the authorized signors.”) Whether the account was established, however, as a result of undue influence or in other situations that would void a transfer is not resolved by the statute.
[1] Gregory Eddington, “Survivorship Rights and Joint Bank Accounts: A Misbegotten Presumption of Intent,” 15 Marquette Elder’s Advisor, 175, 194-5 (2014).
[2] (See ___).
