Do you have or have you thought about having a joint bank account with your significant other? A recent decision in a United States District Court District of Minnesota points out that a commonly held belief about such joint bank accounts is not entirely true. Dooner v. Yuen (D. Minn., 2017). Here are the essential facts for this article.

In 2010, Dooner who was from Minnesota met Yuen in Las Vegas where she lived. In 2011 Yuen came to Minnesota and moved in with Dooner. In December, 2012, a joint bank account was created. Dooner was the only one to deposit money into the joint account. Some time in 2013 their romantic relationship ended. In January, 2013 Yuen wired $298,000 out of the joint account which Dooner claimed was not authorized by him.

For reasons not necessary for this article, in 2016, Dooner sued Yuen for conversion, civil theft, and unjust enrichment for the $298,000 she withdrew back in 2013. Yuen countersued for breach of contract, promissory estoppel, unjust enrichment, and palimony. Her counterclaims were dismissed and Yuen then sought the dismissal of Dooner’s claims on the basis that she was a joint owner of the bank account and therefore entitled to withdraw the funds.
In denying Yuen’s motion to dismiss Dooner’s claims the Court looked at the Minnesota Multi-Party Accounts Act (MPAA), Minn. Stat. §§ 524.6-201, et seq. and case law regarding account ownership rights and the right to withdraw. Citing an Indiana case the Court held that the right to withdraw funds is different from the right of ownership. “Yuen may have had the right to withdraw funds, but Dooner owned the funds and can object to the withdrawal.”

The MPAA specifically provides “a joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit, unless there is clear and convincing evidence of a different intent”. Minn. Stat. § 524.6-203. Thus, the Court ruled that because Dooner deposited all the funds in the account, and despite Yuen’s right to withdraw from the account, she had no ownership interest in those funds unless she could provide clear and convincing evidence the Dooner intended to give her full access to those funds.

The lessons to be learned from this case for cohabitating persons setting up a joint bank account are as follows:

  1. Have a clearly written agreement as to (a) the sources of the funds to be deposited; (b) the use of those funds; (c) limitations on cash withdrawals and transfer amounts to non joint bank accounts; (d) when and how the account will be closed; and (e) how any dispute over the funds will be resolved.
  2. Make sure that you maintain bank records so that if you have a dispute at least you will have a historical use record.