In Re Kuhl, the debtor and her husband were married on November 11, 2011. Four days later, the debtor’s husband added the debtor’s name to his checking account at Security National Bank; romantic, but unwise. On December 12, 2011, the debtor’s husband added the debtor’s name to his checking account at First Community Bank. On January 30, 2012, the debtor and her husband opened a savings account at Security National Bank. The debtor filed for Chapter 7 relief on March 30, 2012. At that time, the balance in the SNB checking account was $8,154, and the balance in the SNB savings account was $16,006. The trustee asked the bankruptcy court to order the debtor to turn over the value of the funds in three bank accounts. In making this demand, the trustee relied on a presumption arising under Illinois law that each owner of a joint bank account owns all of the funds in that account. Debtor argued that her husband was the sole owner of all the money in the accounts notwithstanding the joint ownership of the accounts. The court said that the two primary factors for determining ownership of joint bank accounts are control of the account and the source of the contributions to the accounts. There was no dispute that the accounts were funded exclusively with money belonging to the debtor’s husband, and that his contribution of the money was not intended as a gift to the debtor. In addition, there was no evidence that the debtor exercised any control over the First Community checking account and the SNB savings account. While the SNB savings account was created to pay for both spouse’s health insurance, the court said that fact alone did not support a finding that the funds in the savings account belonged to the debtor. Based on these facts, the court denied the trustee’s request for turnover of the funds from the First Community checking account and the SNB savings account but ordered that debtor turn over to the trustee half of the money in the SNB checking account.

To avoid this kind of problem, do not put your new spouse’s name on any account you owned before marriage.

Lawrence Bautista Yang is a graduate of Georgetown University Law Center and has been in law practice for thirty years. He specializes in bankruptcy, business and civil litigation and has handled more than five thousand successful bankruptcy cases in California. He speaks Mandarin and Fujien and looks forward to discussing your case with you personally. Please call (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.