With the New York State population aging we are not just seeing the increased need for competent estate, life and financial planning, we are also seeing a flood of cases where a disgruntled relative, near or distant, makes an unsavory play for the assets of a family at or near their death. It can be through the abuse of a power of attorney, or by suddenly producing a new will, or, as discussed here, using “undue influence” to change a Payable on Death Beneficiary.
A payable on death (POD) account allows the account owner to designate one or more beneficiaries to receive the funds held in the account at the time of the death of the owner.
The account owner can do what they please with the money held in the account during their lifetime. Then, at the time of death, the designated beneficiaries can withdraw the funds remaining in the account without the need for probate.
POD accounts have certain advantages, but there are many issues that could arise from the use of this estate-planning tool. But this is not an estate-planning post. Its a litigation post.
A chief advantage of the POD account, the fact that money passes quickly and easily outside of Probate also presents a huge vulnerability. It is not so easy to come up with a new last will and testament. And even if a grifter manages it, everyone still needs to be put on notice and the entire estate pass under the watchful eye of the probate court if there are objections.
If a POD name is changed, however, there isn’t necessarily any notification to anyone. And once the account holder is dead the account can be quickly emptied with a death certificate and driver’s license before anyone is the wiser. Once that is done, good luck getting the money back. If you are the POD beneficiary it is to your advantage to keep an eye on anyone cozying up to the account holder as they age and fade. If you are in that kind of a position of trust you may already have, and certainly would prefer to have, a power of attorney that will allow you to monitor accounts where you are the POD beneficiary.
But what happens when the account holder dies or is dying and out of commission and, perhaps in the process of wrapping up affairs or preparing funeral arrangements you check with the bank and find out you are NOT the POD beneficiary when you knew previously you had been? Where you have been replaced by someone you know could only have gained that position by nefarious means.
That is the time for an attorney to act swiftly and by Order to Show Cause to freeze the bank account(s) in question as part of an action purposed to send the proceeds of the accounts to where it should have been in the first place – to you.
A sample Order to Show Cause and Complaint is set out below. The Complaint Index Number is purchased as the same time as the OTSC’s Request for Judicial Intervention and motion fee is paid. The Complaint accompanies the Order to Show Cause as an Exhibit, along with your affirmation explaining what is going on and the client’s affidavit setting out the circumstances of how he came to be replaced as the POD Beneficiary.
You should try to provide as much detail as you can as to why the Court should believe from the get go that the change of the POD was accomplished by undue influence. There are innumerable cases that discuss what goes in to such a showing, usually in the setting of a Last Will and Testament. A common scenario is discussed in Matter of Matinico 177 A.D.3d 882 (App. Div. 2nd Dept. 2019) “proving by clear and convincing evidence that the proponent of the will knowingly made false statements to the testator to induce him or her to make a will which disposed of property in a manner different from that in which the testator would otherwise have disposed of the property.” If the change to the POD account was made at a time when the account holder was mentally disabled by dementia, a common scenario, that should be fleshed out as well as possible too.
The chief relief sought is by way of declaratory relief, seeking a declaration that the Original Holder should be named as the true holder and paid the proceeds of the account by THE BANK and that the accounts should be frozen and/or that THE BANK pay the money in the account into the Court pursuant to CPLR 1006 and consistent with JP Morgan Chase Bank Vs. The Irrevocable Trust For The Benefit Of The Issue Of Renata Black, 55 Misc.3d 1216(A), 58 N.Y.S.3d 874. As a back up and alternative, if the BAD ACTOR has already gotten their hands on the proceeds of the account you want an Order prohibiting them from putting the money out of your reach.
Don’t make the mistake of thinking that THE BANK will freeze accounts just because they received a Certified Letter telling them what you believed happened, and what you intend to do. Without a Court Order they generally won’t do anything.
That is why it is advisable to bang the papers out and walk them through the system as an Emergency Application. Don’t forget that in such a circumstance, while you may alert the bank to what you are doing – they won’t care – you do not want to put the bad actor on notice, lest you cause them to race for the money before you can get a hold in place.
So, in addition to the fact that ex parte applications must comply with CPLR 2217(b). Uniform Rule 202.7 (f), will have to be complied with by the submission of an Affirmation of Emergency circumstances indicating why the application is being brought on by Order to Show Cause and – since you are seeking a temporary restraining order demonstrating that there will be significant prejudice to your client by the giving of notice.
At Supreme Court Special Term Part ___ in and for the County Of _____ New York This ____ day of _____________ 202_. P R E S E N T : HON:________________________________________ SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF COUNTY ————————————————————————-X ORIGINAL HOLDER Plaintiff -against- BAD ACTOR and THE BANK Defendants ————————————————————————-X
ORDER TO SHOW CAUSE
INDEX NO. :
UPON THE READING and filing the affirmation of Peter J. Creedon, dated DATE the Affidavit of ORIGINAL HOLDER dated DATE along with the Exhibits thereto including the Summons and Complaint and after due deliberation and consideration by this Court it is ORDERED that the Defendants show case at an Individual Assignment Part____, Room ____ of this Court to be held in the County of COUNTY at the Supreme Court Building at ADDRESS at 9:30 am on the ____ day of _____________ or as soon thereafter as counsel may be heard why an order should not be made restoring ORIGINAL HOLDER as the Pay on Death Beneficiary of any THE BANK Banking Account associated with the late DECEDENT or the late JOINT ACCOUNT HOLDER or created from money from such accounts and directing THE BANK to pay to ORIGINAL HOLDER any amounts due and owing to him as such a beneficiary or in the alternative restraining such accounts and paying such monies into the Court pending the resolution of this action, and that BAD ACTOR refrain, desist and forebear any efforts to take possessions of such monies or return any such monies she has already taken possession of.
And it is further ORDERED that sufficient reason appearing therefore pending the hearing and determination of this application that;
1. Defendant BAD ACTOR and any person or entity claiming under or through BAD ACTOR is hereby stayed, enjoined and restrained from taking or attempting to take any monies from any THE BANK account now or previously associated with the late DECEDENT or the late JOINT HOLDER or created from money transferred or paid from such accounts and that,
2. Defendant THE BANK freeze and restrain any THE BANK bank account now or previously associated with the late DECEDENT or the late JOINT HOLDER or created from money transferred from such accounts.
FURTHER LET SERVICE of this Order to Show Cause and the papers upon which it is granted, along with a copy of the Summons and Complaint by overnight Federal Express delivery to;
THE BANK LOCAL ADDRESS THE BANK CORPORATE ADDRESS BAD ACTOR be considered good and sufficient service or by personal service pursuant to CPLR 311 on or before the _____ day of ____________________, 2020 and it is further ORDERED that Defendant’s answering papers, if any, shall be served on or before ____________, 2020.
SO ORDERED _________________________ J. S. C. SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF COUNTY ————————————————————————-X
ORIGINAL BENEFICIARY Plaintiff -against- BAD ACTOR and THE BANK & CO. Defendants ————————————————————————-X
INDEX NO. :
Now comes the Plaintiff ORIGINAL BENEFICIARY by his attorneys Creedon & Gill P.C. alleging against Defendants on information and belief the following;
1. ORIGINAL BENEFICIARY is a natural person above the age of 18 years residing in the County of Suffolk.
2. THE BANK is a banking and financial institution incorporated in Delaware, headquartered in the County of New York, State of New York and authorized and doing business as a commercial and personal bank in the State of New York.
3. BAD ACTOR is a natural person above the age of 18 years residing at LOCATION.
4. ORIGINAL BENEFICIARY (“the son”) is the son of the late ORIGINAL ACCOUNT HOLDER (“the father”) and the stepson of ORIGINAL JOINT ACCOUNT HOLDER the father’s wife (“the stepmother”).
5. This suit alleges that BAD ACTOR has used undue influence on an enfeebled, sick, mentally incompetent and confused ORIGINAL JOINT ACCOUNT HOLDER the step mother to substitute her will for the will of ORIGINAL JOINT ACCOUNT HOLDER the stepmother and to cause herself to be named as the Pay on Death Beneficiary of THE BANK accounts held and previously held by ORIGINAL ACCOUNT HOLDER the father and ORIGINAL JOINT ACCOUNT HOLDER the step mother and to remove as the Pay on Death Beneficiary ORIGINAL BENEFICIARY the son who was lawfully, properly and intentionally named as a Pay on Death Beneficiary thereof in order to steal an amount believed to be approximately AMOUNT from ORIGINAL BENEFICIARY the son.
6. It is unknown at this moment whether BAD ACTOR has actually wrongfully acquired the monies described above or still in the process of doing so. She refuses to communicate on the issue.
7. Accordingly the relief requested here is in the alternative; i. to return any monies so stolen or if the theft has not been consummated ii. to refrain from stealing any monies so targeted, and iii. for THE BANK , if they are still in possession of the monies, to freeze the monies so identified or to pay the monies into the Court.
8. In DATE. ORIGINAL BENEFICIARY the son traveled to ORIGINAL ACCOUNT HOLDER the father’s residence in ADDRESS to make arrangements for the father’s impending death.
9. ORIGINAL BENEFICIARY was shown and advised at that time by his father that he was and would remain the Pay on Death Beneficiary of THE BANK Accounts kept by ORIGINAL BENEFICIARY and his wife ORIGINAL JOINT ACCOUNT HOLDER in THE BANK.
10. ORIGINAL JOINT ACCOUNT HOLDER was ORIGINAL ACCOUNT HOLDER the father’s 2nd wife and thereby the step mother of ORIGINAL BENEFICIARY the son.
11. On information and belief account number at issue was XXXX maintained in the THE BANK in LOCATION
12. ORIGINAL ACCOUNT HOLDER the father demanded and received a promise from ORIGINAL BENEFICIARY the son that ORIGINAL BENEFICIARY the son would look after the care for the mental, physical and financial welfare and well being of ORIGINAL JOINT ACCOUNT HOLDER his stepmother, then X years of age, in consideration of the fact that ORIGINAL JOINT ACCOUNT HOLDER his stepmother was sharply declining mentally and physically from dementia and cancer and was in no condition mentally or physically to care for her own affairs.
13. ORIGINAL ACCOUNT HOLDER the father passed intestate in STATE in DATE Upon his death ORIGINAL BENEFICIARY the son pursuant to appointment by ORIGINAL ACCOUNT HOLDER the father managed the funeral arrangements of ORIGINAL BENEFICIARY the father and wound up the affairs of his estate.
14. Thereafter on an ongoing and continuous basis consistent with the promise he had made to ORIGINAL ACCOUNT HOLDER the father, ORIGINAL BENEFICIARY the son arranged for and provided for the ongoing mental, physical and financial welfare and well being of ORIGINAL JOINT ACCOUNT HOLDER his stepmother, then X years of age, in consideration of the fact that she was sharply declining mentally and physically from dementia and cancer and was in no condition mentally or physically to care for her own affairs. .
15. After a fall in LOCATION, ORIGINAL JOINT ACCOUNT HOLDER the step mother died on DATE. Again ORIGINAL BENEFICIARY the stepson was called upon to handle her funeral arrangements, cremation and interment in Arizona and to wind up the affairs of her estate.
16. At about this time ORIGINAL BENEFICIARY the son received credible information that BAD ACTOR had managed to ingratiate herself to ORIGINAL JOINT ACCOUNT HOLDER the stepmother with the intent and purpose of causing herself to be named as the Pay on Death Beneficiary and used undue influence on the enfeebled, confused and mentally incompetent ORIGINAL JOINT ACCOUNT HOLDER to substitute her will for the will of ORIGINAL JOINT ACCOUNT HOLDER and to cause herself to be wrongfully and unlawfully named as the Pay on Death Beneficiary of the accounts held and previously held by ORIGINAL ACCOUNT HOLDER the father and ORIGINAL JOINT ACCOUNT HOLDER the stepmother in place and instead of ORIGINAL BENEFICIARY the son.
17. On DATE towards finalizing his stepmother’s affairs ORIGINAL BENEFICIARY inquired as to his status as the Pay on Death Beneficiary of Chase accounts previously by ORIGINAL JOINT ACCOUNT HOLDER the stepmother and ORIGINAL ACCOUNT HOLDER the father. 18. ORIGINAL BENEFICIARY was advised by THE BANK that while he had been he was no longer named as the Pay on Death Beneficiary on any account which had been held by ORIGINAL JOINT ACCOUNT HOLDER the stepmother or ORIGINAL ACCOUNT HOLDER the father and was advised that BAD ACTOR was in fact now named as a Pay on Death Beneficiary on account(s) held or previously held by ORIGINAL ACCOUNT HOLDER the father and/or ORIGINAL JOINT ACCOUNT HOLDER the stepmother.
19. It is believed that the account numbers were XXXX, XXXX and the amount involved is some AMOUNT. However there may be other THE BANK account numbers involved or a new account created in ORIGINAL JOINT ACCOUNT HOLDER ’s name for the purpose of removing ORIGINAL BENEFICIARY as a Pay on Death Beneficiary, or another looting of the THE BANK accounts.
20. BAD ACTOR either has or will imminently take, wrongfully take and convert monies lawfully owned by and benefitting ORIGINAL ACCOUNT HOLDER the son.
21. An order and declaration is necessary directly THE BANK to freeze, restrain hold any monied described hereto fore or to pay such monies into the Court and that BAD ACTOR refrain, desist and forebear any efforts to take possessions of such monies.
22. By certified mailings dated DATE THE BANK and BAD ACTOR were directed to hold, restrain and freeze any accounts or monies held or previously held by ORIGINAL ACCOUNT HOLDER the father or ORIGINAL JOINT ACCOUNT HOLDER the step mother at any THE BANK branch, or any account into which transfers from such amounts were made, and to forbid any withdrawal, access to or transfer from such account(s). AS AND FOR A FIRST CAUSE OF ACTION
23. Plaintiff repeats and reiterates paragraphs 1 through 22 as if set forth in full at this point.
24. BAD ACTOR has taken possession of the monies heretofore described wrongfully and without legal authority to do so and by undue influence upon he person of ORIGINAL JOINT ACCOUNT HOLDER by substituting her will for that of the sick, enfeebled and mentally incompetent ORIGINAL JOINT ACCOUNT HOLDER and by doing so wrongfully converted, stole and defrauded monies believed to be in the amount of AMOUNT from the lawful possession of ORIGINAL BENEFICIARY and is cast in damages to ORIGINAL BENEFICIARY in that amount. AS AND FOR A SECOND CAUSE OF ACTION
25. Plaintiff repeats and reiterates paragraphs 1 through 24 if as set forth in full at this point.
26. An Order is necessary from this Court forbidding BAD ACTOR to take possession of the monies heretofore described or if she is already in possession on the monies so described to return them to the Plaintiff. AS AND FOR A THIRD CAUSE OF ACTION
27. Plaintiff repeats and reiterates paragraphs 1 through 26 if as set forth in full at this point.
28. By reason of the foregoing an Order is necessary from this Court obligating THE BANK to hold, restrain and freeze any accounts or monies held or previously held by Ronald H Templeton the father or ORIGINAL JOINT ACCOUNT HOLDER the step mother at any THE BANK Branch, or any account into which transfers from such amounts were made, and to forbid any withdrawal, access to or transfer from such account(s) or in the alternative that THE BANK pay such monies into the Court consistent with CPLR 1006 and consistent with THE BANK Vs. The Irrevocable Trust For The Benefit Of The Issue Of Renata Black, 55 Misc.3d 1216(A), 58 N.Y.S.3d 874.
WHEREFORE PLAINTIFF demands on his;
First Cause of Action damages from BAD ACTOR in an amount to be determined on the trial of this action but believed to be approximately $300,000.00
On his Second Cause of Action an Order forbidding BAD ACTOR from any withdrawal, access to or transfer of any monies associated with any account(s) previously held or created by ORIGINAL ACCOUNT HOLDER or ORIGINAL JOINT ACCOUNT HOLDER or any account created or receiving monies from such accounts or if she has already done so an Order directing the monies be returned to Plaintiff.
On his Third Cause of Action for an Order directing THE BANK to hold, restrain and freeze any accounts or monies held or previously held by ORIGINAL ACCOUNT HOLDER the father or ORIGINAL JOINT ACCOUNT HOLDER the step mother or any account created or receiving monies from such accounts at any THE BANK Branch, or any account into which transfers from such amounts were made, and to forbid any withdrawal, access to or transfer from such account(s) or in the alternative that THE BANK pay monies so held into the Court consistent with CPLR 1006 and THE BANK Vs. The Irrevocable Trust For The Benefit Of The Issue Of Renata Black, 55 Misc.3d 1216(A), 58 N.Y.S.3d 874.
Northport New York.
THE BANK .
CREEDON & GILL P.C.
Peter J. Creedon
24 Woodbine Ave, Ste. 8
Northport, New York 11768