In Re Estate of Calvert Hugh Fletcher
538 S.W.3d 444
| Tenn. | 2017Background
- Calvert and Nelda Fletcher opened a joint FSG Bank checking account labeled “JOINT – WITH SURVIVORSHIP”; either spouse could withdraw funds.
- After refinancing their home in April 2012, most proceeds were deposited into that joint account.
- In January 2013, Calvert unilaterally withdrew $100,000 from the joint account and purchased a $100,000 certificate of deposit (CD) issued solely in his name; the joint account was closed in February 2013.
- Calvert died September 6, 2013; his will left the residuary estate to his four children and tangible personal property to Nelda; Nelda qualified as executrix and claimed the CD as her separate property.
- The probate court held the CD was estate property (relying on Mays); the Court of Appeals reversed, holding the funds remained entireties property traceable to the joint account (relying on In re Estate of Grass).
- The Tennessee Supreme Court granted review to decide whether funds withdrawn from an account held by spouses as tenants by the entirety remain entireties property when reinvested in the withdrawing spouse’s name.
Issues
| Issue | Plaintiff's Argument (Children) | Defendant's Argument (Nelda) | Held |
|---|---|---|---|
| Whether funds withdrawn unilaterally from a joint bank account held by spouses as tenants by the entirety cease to be entireties property | Withdrawal destroys entirety character; funds become the withdrawing spouse’s property and any reinvestment belongs to estate | Withdrawn funds remain impressed with entirety and pass to surviving spouse by right of survivorship | Withdrawn funds cease to be entireties property; CD belonged to decedent’s estate |
| Whether the joint account agreement (right of survivorship / single-signature) constitutes prior consent to unilateral withdrawal | Bank-authorized single-signature withdrawal shows withdrawing spouse had authority; does not change result favoring estate | Joint-account label and survivorship presumption mean non-withdrawing spouse retains interest despite unilateral withdrawal | Account terms permitting single-signature withdrawals do not preserve entirety status after withdrawal; unilateral withdrawal severs entirety in those funds |
| Whether tracing or presumed agency supports treating reinvested funds as still entireties property | Tracing should protect surviving spouse; proceeds remain impressed with entirety | Tracing argument favors survivor—funds identifiable as coming from joint account | Court rejected tracing approach as impractical; clarity favors treating withdrawn funds as severed from entirety |
| Whether prior Tennessee precedent requires a different outcome | Mays supports estate’s claim; Grahl/Griffin/Sloan suggest broader protection for surviving spouse | Relied on Sloan/Griffin/Grahl and In re Grass to argue funds remain entireties property | Court overruled inconsistent prior rulings to adopt the Arkansas approach (following Mays) and rejected the Pennsylvania tracing approach |
Key Cases Cited
- Sloan v. Jones, 241 S.W.2d 506 (Tenn. 1951) (addresses creation of entirety in joint bank deposits and discusses agency implication for withdrawals)
- Griffin v. Prince, 632 S.W.2d 532 (Tenn. 1982) (holds joint deposit by spouses can be tenancy by the entirety despite account wording)
- Mays v. Brighton Bank, 832 S.W.2d 347 (Tenn. Ct. App. 1992) (adopts approach that unilateral withdrawal severs entirety character of withdrawn funds)
- McEntire v. Estate of McEntire, 590 S.W.2d 241 (Ark. 1979) (Arkansas approach: withdrawn funds cease to be entirety property)
- Madden v. Gosztonyi Sav. & Trust Co., 200 A. 624 (Pa. 1938) (Pennsylvania approach: withdrawn funds remain impressed with entirety and subject to survivorship)
- Grahl v. Davis, 971 S.W.2d 373 (Tenn. 1998) (discusses tensions among Tennessee cases; noted Mays may be inconsistent with prior decisions)
- Cloud v. Brandt, 259 S.W.3d 439 (Ark. 2007) (reaffirms Arkansas approach that unilateral withdrawal can terminate entirety interest)