Be Careful About Joint Accounts (October 31st, 2014)

A recent case from the Court of Special Appeals (on appeal to the Court of Special Appeals) held that a person is not an “owner” of a bank account simply because her name was on the account for the purposes of allowing withdrawals. In Wagner v. State of Maryland, a father added his daughter’s name to his bank account so she could withdraw money in the event he was not able to go to the bank. There was no agreement that his daughter would have access to the money for her own use. Despite this, the daughter took nearly $125,000 from the account. She was charged with theft.

She argued that because she had the right to withdraw funds, she could not be charged with theft. The court disagreed, holding that while she did have the right to make withdrawals, she could only lawfully use the money for her father’s benefit. When she took money for her own use, it became a criminal act.

People who have their names added to a bank account for the convenience of the primary account holder must be careful to use any money they withdraw for the primary account holder’s benefit. All expenditures should be documented in the event proof is necessary to avoid the suggestion of criminal conduct. The moral of the story: Just because your name is on the account does not make it yours. If your name is added to an account and the understanding is that you can use the money for your own benefit, get something in writing to protect yourself in the event it is challenged later.