The Tennessee Supreme Court has unanimously ruled that, when one spouse unilaterally withdraws money from a married couple's joint bank account and places the funds in a certificate of deposit, the funds are no longer joint property and belong to the spouse to whom the certificate of deposit was issued.
After reviewing cases from Tennessee and other states, the Supreme Court held that, once a husband or wife withdraws funds from a joint bank account held as tenants by the entirety, the funds cease to be held by the entirety. The Supreme Court found this approach provides the clarity and finality needed in the current banking environment, noting it would be difficult for a third party receiving funds to know the source of the money and if someone else has an ownership interest in the funds.
In an opinion authored by Justice Sharon G. Lee, the Court held that the certificate of deposit issued to Mr. Fletcher from money withdrawn from the couple's joint bank account was owned by Mr. Fletcher at his death and, therefore, was not owned by Mrs. Fletcher, but became a part of Mr. Fletcher's estate and passed under the terms of his will.