if an elderly woman added a non-elderly joint account holder to help pay her bills, and the new joint holder began writing large checks into his own accounts, and writing frequent checks to 'cash' with subject/memo lines of things that were never provided, eventually cleaning out the entire account and all of her money, are they liable at all? or because it is a joint account, even though the intent was to pay elderly persons bills, he has right to all of of money in the account?
1 Answer
Legally, money in a joint account belongs to both people
Assuming the account is “any one to sign”, then either party can lawfully withdraw any or all of the money. The bank has no liability to anyone if either party misuse the funds.
There may be a fiduciary relationship
It is arguable that the man has a fiduciary obligation to the elderly woman. It is not a relationship that automatically creates such a relationship but it’s arguable that there is a constructive trust here.
If the court agrees, then the man’s failure to act in the elderly woman’s interest is a breach of trust and he would be liable to return the money.
Elder abuse
In many jurisdictions, (e.g. all states and territories in australia, except new-south-wales) financial abuse is criminal domestic violence.
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The analysis is similar under U.S. law. In lieu of a fiduciary relationship, sometimes it is stated that a mere exertion of undue influence in the context of a confidential relationship (which is less than a fiduciary relationship) is sufficient. Also, while it is lawful for either party to withdraw funds without bank supervision, the funds are usually owned, under U.S. law, in proportion to contribution. Commented Jan 12 at 22:31