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Posted by: Landry Butler on Dec 6, 2017

Court: TN Supreme Court

Attorneys 1:

Henry D. Fincher, Cookeville, Tennessee, for the appellants, Elaine Fletcher, Janet L. Fletcher Brady, Richard H. Fletcher, and Peter J. Fletcher.

Attorneys 2:

Kenneth S. Williams, Cookeville, Tennessee, for the appellee, Nelda Karene Fletcher.

Michael T. Harmon and Timothy L. Amos, Nashville, Tennessee, for Amicus Curiae, Tennessee Bankers Association.

Judge(s): LEE

A husband and wife deposited funds in a joint checking account designated with a right of survivorship. Later, the husband withdrew most of the funds from the joint account and placed the funds in a certificate of deposit issued solely in his name. After the husband’s death, a dispute arose between his surviving spouse and his children from a previous marriage regarding ownership of the certificate of deposit. The trial court, relying on Mays v. Brighton Bank, 832 S.W.2d 347 (Tenn. Ct. App. 1992), held that the certificate of deposit was an asset of the husband’s estate because the funds ceased to be entireties property when withdrawn from the joint account. The Court of Appeals reversed and, relying on In re Estate of Grass, No. M2005-00641-COA-R3-CV, 2008 WL 2343068, at *1 (Tenn. Ct. App. June 4, 2008), held that the certificate of deposit belonged to the surviving spouse because the funds were impressed with the entireties and could be traced to the joint account. We hold that once funds are withdrawn from a bank account held by a married couple as tenants by the entirety, the funds cease to be entireties property. Accordingly, the certificate of deposit issued to the husband from funds withdrawn from the joint bank account belongs to his estate, not his surviving spouse. We reverse the Court of Appeals and remand to the trial court for further proceedings.