Kennemer v. Fort Worth Cmty. Credit Union, 335 S.W.3d 843 (Tex. App.—El Paso 2011, pet. denied).
Credit Union used a single contract to govern all of a customer’s
accounts opened under the same membership number. The contract provided
that any joint accounts opened under the contract would have rights of
survivorship. After one party (husband) to a joint account died, Credit
Union paid all funds in the account to the survivor (wife).
Approximately one year later, Independent Executor claimed that the
account lacked the survivorship feature because the specific account
lacked its own survivorship agreement. Accordingly, the executor
asserted that the estate was entitled to one-half of the account because
the account contained community property. The trial court granted
summary judgment in favor of Credit Union and Independent Executor
appealed.
The appellate court affirmed. The court found that the language of the
contract which both husband and wife signed governed all of the accounts
they had in Credit Union whether they were open at the time they signed
the agreement or thereafter.
Note: The court reached an issue which was not necessary to decide, that
is, whether the account had the survivorship feature. Credit Union was
entitled to pay any party to the joint account any part of or all of the
funds in the account under Probate Code § 445. The court failed to
distinguish between ownership of the funds in the account and the
ability to withdraw those funds. Even if the account lack the
survivorship feature, Credit Union had the authority to pay all funds in
the account to the surviving joint party.
Moral: A financial institution may rely on one account contract to
govern multiple accounts.