The Maryland Court of Special Appeals finally given a clear opinion on whether one joint owner of a bank account can be found guilty of criminal theft from the other joint owner by withdrawing funds from that same account. The answer is "yes," and jail time awaits those who commit the crime.
On October 31, 2014, the appellate court decided Wagner v. State, a case where the daughter of an 84 year old man was sentenced to eight years in prison (with all but 18 months suspended) for drawing over $122,000 out of jointly owned bank accounts. The case speaks to any family where children are added to accounts by elderly parents, and it speaks loudest to those families where children take advantage of their elderly parents by using the money for their own purposes.
Mr. Wagner, 84 years old, simply wanted a family member to help manage his accounts, and to have access to an ATM. Like many older folks, he trusted his kids, and so Mr. Wagner added one of his adult daughters to his bank account (and IRA). Similarly, the daughter added Mr. Wagner to her accounts.
Up to this point, the story is very common, and the actions are well intentioned. We routinely field questions from children who seek to control their parents access to money in joint accounts to 1) preserve an anticipated inheritance, or 2) to keep Dad from lavishing gifts on another woman, or 3) to pay the child's personal expenses. In the best cases, we can persuade and counsel that the money belongs to the elderly parent, and absent court ordered guardianship, the parent is free to spend the money as he sees fit-- even on fast cars (or scooters?) and a reckless social life.
But Mr. Wagner's daughter drew money out of joint accounts solely for her benefit, and to support a failing business. And for that, she was convicted and sent to prison.
The case is important because it explains how banking rules on joint ownership are to be balanced with real life relationships. It remains appropriate for an elderly parent to name a relative as an authorized person on the bank account. And it allows the elderly parent to later demonstrate that joint naming of the account does not necessarily imply joint ownership of the funds in that account.
It was Mr. Wagner's testimony that sent his daughter to jail.
Joint naming of bank accounts will always be a useful tool for helping mom and dad manage their money--just remember that it is always their money, and not yours!
But Mr. Wagner's daughter drew money out of joint accounts solely for her benefit, and to support a failing business. And for that, she was convicted and sent to prison.
The case is important because it explains how banking rules on joint ownership are to be balanced with real life relationships. It remains appropriate for an elderly parent to name a relative as an authorized person on the bank account. And it allows the elderly parent to later demonstrate that joint naming of the account does not necessarily imply joint ownership of the funds in that account.
It was Mr. Wagner's testimony that sent his daughter to jail.
Joint naming of bank accounts will always be a useful tool for helping mom and dad manage their money--just remember that it is always their money, and not yours!
