Garnishment of a Joint Account When Funds Belong to Non-Debtor Owner

Under tenants by entireties law, a joint account between married couples is protected from garnishment resulting from a separate judgment against just one of the spouses.

But what if the joint account is not tenants by entireties? Or, what if the account is jointly owned between unmarried family members (such as parent and child)?

When a joint account is not tenants by entireties, it is likely either tenants in common or joint tenants with right of survivorship (JTWROS). When a financial account is titled as joint tenants with right of survivorship the bank account will automatically vest and transfer to the surviving owner upon the death of the other owner.

Sometimes a judgment debtor shares title to a bank account with a non-debtor individual. The two most common situations are when the judgment debtor is added to an elderly parent’s account in order to help the parent manage their own finances. Or, a judgment debtor may still be on an account with their child (who’s now an adult).

In that case, the judgment debtor shares title to the bank account, but the money in the bank account actually belongs and is sourced from the non-debtor owner.

So what happens if that account is then garnished because one of the account owners is subject to a money judgment?

In my opinion the funds that clearly belong to the non-debtor joint owner should be exempt from garnishment.

The general rule that “property which is not actually and in good conscience’ deemed to be owned by the debtor may not be secured by the judgment creditor.” Review Antuna vs. Dawson, a case from the 4th District Court of Appeal.

For example, if a judgment debtor shares title to an account with his elderly mother with all of the funds in the account sourced from the mother’s own income and being used for the mother’s own expenses, I do not think that the property in good conscience could be deemed to be owned by the judgment debtor. Rather, the judgment debtor would merely be handling the money for the benefit of the mother. It might even be resulting trust situation.

On the other hand, if in the same example the judgment debtor used the joint account funds for his own benefit, then I do think the funds could be subject to the garnishment.