                                                                                        12/06/2017
                 IN THE SUPREME COURT OF TENNESSEE
                            AT NASHVILLE
                       April 5, 2017 Session Heard at Jackson

                IN RE ESTATE OF CALVERT HUGH FLETCHER

                  Appeal by Permission from the Court of Appeals
                        Probate Court for Putnam County
                     No. 18589       Steven D. Qualls, Judge
                     ___________________________________

                            No. M2015-01297-SC-R11-CV
                       ___________________________________



A husband and wife deposited funds in a joint checking account designated with a right
of survivorship. Later, the husband withdrew most of the funds from the joint account
and placed the funds in a certificate of deposit issued solely in his name. After the
husband’s death, a dispute arose between his surviving spouse and his children from a
previous marriage regarding ownership of the certificate of deposit. The trial court,
relying on Mays v. Brighton Bank, 832 S.W.2d 347 (Tenn. Ct. App. 1992), held that the
certificate of deposit was an asset of the husband’s estate because the funds ceased to be
entireties property when withdrawn from the joint account. The Court of Appeals
reversed and, relying on In re Estate of Grass, No. M2005-00641-COA-R3-CV, 2008
WL 2343068, at *1 (Tenn. Ct. App. June 4, 2008), held that the certificate of deposit
belonged to the surviving spouse because the funds were impressed with the entireties
and could be traced to the joint account. We hold that once funds are withdrawn from a
bank account held by a married couple as tenants by the entirety, the funds cease to be
entireties property. Accordingly, the certificate of deposit issued to the husband from
funds withdrawn from the joint bank account belongs to his estate, not his surviving
spouse. We reverse the Court of Appeals and remand to the trial court for further
proceedings.

   Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
                           Reversed; Case Remanded

SHARON G. LEE, J., delivered the opinion of the court, in which JEFFREY S. BIVINS, C.J.,
and CORNELIA A. CLARK, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.
Henry D. Fincher, Cookeville, Tennessee, for the appellants, Elaine Fletcher, Janet L.
Fletcher Brady, Richard H. Fletcher, and Peter J. Fletcher.

Kenneth S. Williams, Cookeville, Tennessee, for the appellee, Nelda Karene Fletcher.

Michael T. Harmon and Timothy L. Amos, Nashville, Tennessee, for Amicus Curiae,
Tennessee Bankers Association.

                                        OPINION

                                             I.

       In April 2012, Calvert Hugh Fletcher and his wife, Nelda Karene Fletcher,
refinanced their home and paid off a line of credit secured by the home. They deposited
most of the proceeds into a newly-opened joint checking account with FSG Bank. The
FSG Bank account agreement designated the account as “JOINT – WITH
SURVIVORSHIP (and not as tenants in common).” Funds could be withdrawn from the
account based on the signature of either Mr. or Mrs. Fletcher.

       In January 2013, Mr. Fletcher withdrew $100,000 from the joint checking account
and obtained a $100,000 certificate of deposit solely in his name, issued by FSG Bank.
The certificate of deposit was pledged as security for a $100,000 line of credit, although
the line of credit was never used. In February 2013, the FSG joint checking account was
closed.

        Mr. Fletcher became ill in March 2013 and died on September 6, 2013. In his will,
Mr. Fletcher bequeathed his tangible personal property and effects to Mrs. Fletcher and
left the residuary estate to his four adult children from a prior marriage.

       Mrs. Fletcher filed the will for probate in the Putnam County Probate Court and
was appointed executrix for the estate. Mrs. Fletcher filed an estate inventory with the
court, listing the certificate of deposit as a non-estate asset, and later filed a petition
asking the probate court to designate the certificate of deposit as her separate marital
property. Mr. Fletcher’s children maintained that the certificate of deposit was estate
property.

        At the hearing to determine ownership of the certificate of deposit, Mrs. Fletcher
testified that in April 2012, she and Mr. Fletcher opened a joint bank account in a money
market fund at FSG Bank with an initial deposit of $100,415.73. Of these funds,
$89,779.97 came from the refinancing of the mortgage on their marital home, and the rest
of the money came from marital funds. Mrs. Fletcher said she knew Mr. Fletcher
intended to use the funds in the joint account for potential future investments, but she did
not agree for Mr. Fletcher to transfer $100,000 from the joint bank account into a
                                             2
certificate of deposit issued solely in his name. Mrs. Fletcher testified she did not know
the funds had been withdrawn until December 2013, when she spoke with a bank officer
to receive an update on the couple’s accounts.

       Mrs. Fletcher admitted that she signed the joint account card that provided only
one signature was required for withdrawal of funds. Mrs. Fletcher explained that she paid
the family’s bills and that bank statements were mailed to the marital home. Although her
practice was to open and review the bank statements, Mrs. Fletcher did not recall seeing a
statement evidencing a withdrawal in January 2013 of just over $100,000 or a statement
indicating that the joint account had been closed in February 2013. Although Mrs.
Fletcher knew that Mr. Fletcher was investing in real estate and working to develop
Walden Villages subdivision when he became ill, she did not try to prevent him from
investing. Mrs. Fletcher testified that she knew if he wanted to, Mr. Fletcher would use
the money from the refinance loan for investment purposes. When asked if she would
have agreed for Mr. Fletcher to withdraw $100,000 to purchase stock, Mrs. Fletcher
acknowledged that he probably would not have asked her because that was his practice.
Mrs. Fletcher agreed that she could have withdrawn $100,000 from the joint account but
would not have done so.

        Mr. Fletcher’s daughter, Elaine Fletcher, testified that in April 2013, her father
asked her to assist Mrs. Fletcher in repaying a loan. While at the Fletchers’ home, Elaine
Fletcher saw a statement on the kitchen table for an account only in her father’s name
containing $100,000, which she and Mrs. Fletcher discussed. Elaine Fletcher overheard
Mrs. Fletcher’s side of a conversation with FSG Bank Vice-President Howard Bilbrey.
Elaine Fletcher also spoke with Mr. Bilbrey, who told her that the money was in a
certificate of deposit and would be difficult to withdraw. When Elaine Fletcher relayed
this information to Mrs. Fletcher, they were both surprised to learn the money was in a
certificate of deposit, but Mrs. Fletcher was not surprised that it was in only Mr.
Fletcher’s name.

       Janet Fletcher Brady, another of Mr. Fletcher’s children, testified she came to help
care for her father in March and April 2013. Ms. Brady said that Mrs. Fletcher knew of
the investment in Walden Villages subdivision and that Mrs. Fletcher was handling the
finances for herself and Mr. Fletcher.

        The probate court ruled that the certificate of deposit was an asset of Mr.
Fletcher’s estate, relying on Mays v. Brighton Bank, 832 S.W.2d 347, 351 (Tenn. Ct.
App. 1992), which held that the withdrawn funds ceased to be tenancy by the entirety
property upon withdrawal. The probate court found that after the April 2013 telephone
conversation with Mr. Bilbrey, Mrs. Fletcher knew or should have known that the
certificate of deposit existed, or at least that the funds were held in something other than
the Fletchers’ joint checking account, and that she acquiesced in creating the certificate of
deposit. Further, the probate court ruled that there was no proof of fraud, noting that Mr.
                                             3
Fletcher directed FSB Bank to send the certificate of deposit account statements to the
marital home. The probate court held that the funds from the Fletchers’ joint account
ceased to be entireties property. Because the certificate of deposit was only in Mr.
Fletcher’s name at the time of his death and there were no designations of payment on
death to any individual, the certificate of deposit was part of Mr. Fletcher’s estate.1 Mrs.
Fletcher appealed.

       The Court of Appeals reversed and held that the funds in the certificate of deposit
belonged to Mrs. Fletcher, as the certificate of deposit was entireties property at Mr.
Fletcher’s death. In re Estate of Fletcher, No. M2015-01297-COA-R3-CV, 2016 WL
3090920, at *10 (Tenn. Ct. App. May 23, 2016). The Court of Appeals noted the split of
authority on this issue in the Tennessee appellate courts and in other jurisdictions. Id. at
*4. Compare Mays v. Brighton Bank, 832 S.W.2d 347, 350–51 (Tenn. Ct. App. 1992)
(following McEntire v. Estate of McEntire, 590 S.W.2d 241, 244–45 (Ark. 1979)
(holding that the wife’s withdrawal of funds from a joint account eliminated the entireties
nature of the funds)), with In re Estate of Grass, No. M2005-00641-COA-R3-CV, 2008
WL 2343068, at *14 (Tenn. Ct. App. June 4, 2008) (following Madden v. Gosztonyi Sav.
& Trust Co., 200 A. 624, 630–31 (Pa. 1938) (holding that funds withdrawn from a
marital account remained impressed as entireties property and receipt of the property was
subject to the entirety provision)). The Court of Appeals rejected Mays and relied on
Grass, based on its conclusion that a spouse’s ownership interest should not cease
because the other spouse withdrew funds from the joint account. Fletcher, 2016 WL
3090920, at *9. Further, the Court of Appeals reasoned that the joint account agreement
should not be construed as proof of prior consent to termination of the tenancy by the
entirety through unilateral withdrawal. Id. at *9–10. The intermediate appellate court
concluded that the evidence did not establish that Mrs. Fletcher agreed to give up her
entirety interest in the funds withdrawn by Mr. Fletcher. Id. at *10. The Court of Appeals
held that the certificate of deposit passed to Mrs. Fletcher as the surviving spouse because
the funds were impressed with the entirety provision. Id.

       We granted the application for permission to appeal filed by Mr. Fletcher’s
children.

                                                    II.

       This matter was heard without a jury; therefore, our standard of review is de novo
upon the record of the proceedings below with a presumption of correctness as to the trial
court’s factual determinations, unless the evidence preponderates otherwise. Tenn. R.
App. P. 13(d); Cross v. City of Memphis, 20 S.W.3d 642, 645 (Tenn. 2000) (citing Tenn.

        1
         The trial court certified the order as final, finding “no just reason for delay” under Rule 54.02 of
the Tennessee Rules of Civil Procedure.

                                                     4
R. App. P. 13(d)). There is no presumption of correctness, however, as to the trial court’s
legal conclusions. Mills v. Fulmarque, Inc., 360 S.W.3d 362, 366 (Tenn. 2012) (citing
Hall v. Haynes, 319 S.W.3d 564, 571 (Tenn. 2010); Bailey v. Blount Cnty. Bd. of Educ.,
303 S.W.3d 216, 226 (Tenn. 2010)).

        Under Tennessee law, a married couple can own property as tenants by the
entirety. See Bryant v. Bryant, 522 S.W.3d 392, 400 (Tenn. 2017) (citing Griffin v.
Prince, 632 S.W.2d 532, 534–35 (Tenn. 1982); Tenn. Code Ann. §§ 36-3-505, 31-1-108).
Tenancy by the entirety is a form of property ownership unique to married persons. Grahl
v. Davis, 971 S.W.2d 373, 378 (Tenn. 1998) (citing Griffin, 632 S.W.2d at 534). Each
spouse holds an interest in the entirety—the whole property—rather than in undivided
parts. Bryant, 522 S.W.3d at 400–01 (quoting Tindell v. Tindell, 37 S.W. 1105, 1106
(Tenn. Ch. App. 1896)). “When property is held in a tenancy by the entirety, upon the
death of one spouse, the survivor continues to own the whole in fee simple,” Id. at 400,
and the laws of descent and distribution do not apply. Grahl, 971 S.W.2d at 378 (citing
Sloan v. Jones, 241 S.W.2d 506, 509 (Tenn. 1951)). Married couples can own both real
property and personal property, including bank accounts, as tenants by the entirety.
Griffin, 632 S.W.2d at 535 (citing Campbell v. Campbell, 66 S.W.2d 990 (Tenn. 1934);
Smith v. Haire, 181 S.W. 161 (Tenn. 1915)). When the property is real estate held as a
tenancy by the entirety, one spouse cannot unilaterally sever the tenancy by transferring a
portion of the property to a third party without the consent of the other spouse because
doing so would destroy the other spouse’s ownership interest in the whole. Bryant, 522
S.W.3d at 401 (citing Tindell, 37 S.W. at 1106); see also Sloan, 241 S.W.2d at 509
(stating that when a married couple acquired real estate, “there would be no question . . .
that upon the death of one[,] the survivor would take the entire real estate”).

       Bank accounts are treated differently given the nature of the asset. Unlike real
property, portions of a joint bank account can be unilaterally withdrawn without severing
or destroying the tenancy. See Tenn. Code Ann. § 45-2-703(c) (1988) (defining
“multiple-party deposit account” as an account established in the names of or subject to
withdrawal by two or more persons).

       Here, the Fletchers’ FSG Bank account was designated, “JOINT – WITH
SURVIVORSHIP (and not as tenants in common).” The parties do not dispute that Mr.
and Mrs. Fletcher held the joint account as tenants by the entirety.2 A joint bank account
held by husband and wife is presumed to be a tenancy by the entirety absent proof to the
contrary. Grahl, 971 S.W.2d at 378 (citing Griffin, 632 S.W.2d at 536). Words in a legal
instrument that make two persons joint tenants or tenants in common create a tenancy by

        2
          Here, no issue was raised as to whether the designation on a bank’s signature card as “JOINT –
WITH SURVIVORSHIP (and not as tenants in common)” was sufficient to overcome the presumption
that the bank account was held as tenants by the entirety.

                                                   5
the entirety in an account held by husband and wife. Griffin, 632 S.W.2d at 535 (citing
First Am. Nat’l Bank v. Evans, 417 S.W.2d 778, 780–81 (Tenn. 1967); Bennett v.
Hutchens, 179 S.W. 629 (Tenn. 1915)). This is the case even if the account cards do not
use the words, “tenants by the entirety,” or use the word, “joint.” Id. at 536.

       Although the Fletchers could have provided that both of their signatures were
required for a withdrawal of funds, they agreed that either signature was sufficient to
withdraw funds. Based on the terms of the account agreement, at the death of one spouse,
the surviving spouse retained ownership over any funds in the account. Mr. Fletcher, as
authorized by the account agreement, withdrew funds from this joint checking account
without his wife’s signature. He then placed the funds in a certificate of deposit solely in
his name. Upon Mr. Fletcher’s death, Mrs. Fletcher continued to own the funds in the
bank account.

       The issue before us is whether the certificate of deposit, consisting of funds
withdrawn from the joint account, belongs to Mr. Fletcher’s estate upon his death, or if
the withdrawn funds are impressed with the entirety such that the certificate of deposit
belongs to Mrs. Fletcher as his surviving spouse. There is a split of authority on this issue
in Tennessee and in courts across the country. It is a matter of first impression for this
Court.

        In Sloan v. Jones, 241 S.W.2d 506 (Tenn. 1951), the Tennessee Supreme Court
was not presented with the issue. However, the Court cited with approval the
Pennsylvania case of Madden v. Gosztonyi Sav. & Trust Co., 200 A. 624, 630 (Pa. 1938),
for the proposition that bank deposits payable to “husband and wife” or to “husband or
wife” are held by them as tenants by the entirety. Sloan, 241 S.W.2d at 508. The Supreme
Court in Sloan held that a tenancy by the entirety may be created by a joint bank deposit,
where the parties demonstrate an intent to jointly own the account or such intent can be
inferred from the circumstances. When an account is made payable to either “husband
and wife” or “husband or wife,” each has the power to act for the other as an incident of
an estate by the entirety. Id. (quoting Madden, 200 A. at 630). Through this implied
agency or authority, the husband or the wife may “withdraw the entire account, but the
money thus withdrawn is impressed with the entirety provision that it is the property of
both.” Id. at 509 (quoting Madden, 200 A. at 631 (internal quotation marks omitted)).
Anyone dealing with such specific property knowing it belongs to both spouses “must
submit to the consequences.” Id. (quoting Madden, 200 A. at 631 (internal quotation
marks omitted)). Although this additional language had little to do with our ultimate
holding in Sloan, the Madden language resurfaced many years later as tenancy by the
entireties principles and the application of those principles to bank accounts developed
further.

       In Griffin v. Prince, 632 S.W.2d 532 (Tenn. 1982), this Court considered whether
an individual creditor of the husband could garnish the husband and wife’s joint checking
                                             6
and savings accounts. The accounts were held in the name of Mr. or Mrs. Prince, and the
signature cards for the accounts indicated that they were joint accounts with the right of
survivorship. Id. at 533–34. The Tennessee Supreme Court ordered the dismissal of the
garnishment. Id. at 538. Relying on Sloan and Madden, the Court determined that the fact
the account cards did not use the words, “tenants by the entirety,” or that they used the
word, “joint,” did not prevent ownership by the entirety if the depositors were married
when the account was created and were still married at the time of the garnishment. Id. at
536.

      The Griffin Court briefly addressed the import of the banking statute, Tennessee
Code Annotated section 45-2-703, which, at the time, provided:

      (a) When a deposit has been made or shall hereafter be made, in any bank
      in the names of two (2) or more persons, payable to either, or survivor, such
      deposit, or any part thereof, . . . whether the others be living or not; and the
      receipt or acquittance of such person so paid shall be a valid and sufficient
      release and discharge to the bank for any payment so made.

Tenn. Code Ann. § 45-2-703(a) (1980), quoted in Griffin, 632 S.W.2d at 537. The statute
did not abolish tenancy by the entirety in bank deposits held by spouses or change the
fundamental form of property ownership in bank accounts because the accounts were
payable to either spouse or subject to individual checking or withdrawal. Griffin, 632
S.W.2d at 537.

       After Griffin, the General Assembly amended section 45-2-703(a) by adding the
following sentence to protect the interest of creditors:

      Any balance so created shall be subject to assignment by, or the claim of
      any creditor of, either depositor, as if such depositor were the sole owner of
      the funds; provided, however, that if such creditor realizes its claim, by
      garnishment, set off, or otherwise, any other depositor may, by appropriate
      action against the creditor, establish such rights as that depositor may have
      in the funds.

Tenn. Code Ann. § 45-2-703(a) (1983). This amendment made no substantive change
relative to joint bank accounts created by husband and wife and did not repudiate Griffin.
Edwards v. Edwards, 713 S.W.2d 642, 646 (Tenn. 1986).

       In 1988, the General Assembly again amended section 45-2-703(a) by adding the
following language:

      Any balance so created, including, without limitation, any balance held by
      spouses, shall be subject to assignment by, or the claim of any creditor of,
                                             7
       either depositor, as if such depositor were the sole owner of the funds;
       provided, that if such creditor realizes its claim by any means other than
       enforcement of an assignment, pledge, or the grant of a security interest
       made by any one (1) of such depositors, any other depositor not indebted to
       the creditor may, by commencing a separate action against the creditor,
       establish such rights as that depositor may have in the funds.

Tenn. Code Ann. § 45-2-703(a) (Supp. 1993) (emphasis added). These statutory
amendments clarified the rights of creditors and the other account owner(s) but did not
address the legal status of property acquired with funds withdrawn unilaterally by one of
the account owners.

        The Court of Appeals in Mays v. Brighton Bank, 832 S.W.2d 347 (Tenn. Ct. App.
1992), addressed the issue concerning the legal status of property acquired in part with an
individual loan deposited into a joint bank account owned by a husband and wife as
tenants by the entirety. Mr. Mays borrowed money to purchase a horse trailer to give to
his wife; his wife was not a party to the loan agreement. Id. at 348. The terms of the loan
granted the bank a security interest in the trailer. The loan proceeds were deposited into
the Mayses’ joint account, from which Mrs. Mays made the down payment and final
payment for the trailer. Id. at 349. When she made the final payment, Mrs. Mays received
a certificate of origin that assigned ownership of the trailer solely to her. No liens were
recorded on the trailer’s certificate of origin. When the parties divorced shortly after the
purchase of the trailer, the bank repossessed the trailer. Mrs. Mays brought a detainer
action against the bank to recover the trailer. Id. at 348–49. The trial court held that the
bank had a purchase money security interest in the trailer. Id. at 352. Citing Sloan and
Griffin, the trial court determined that Mr. and Mrs. Mays each owned the loan funds
deposited into their joint account as tenants by the entirety. Id. at 350. However, property
purchased by one spouse with funds withdrawn from the bank account held by the
spouses does not automatically become tenancy by the entirety property; instead, the
legal status of property purchased with the funds depends on the legal status of the funds.
The Court of Appeals affirmed, recognizing a split of authority as to whether the property
purchased with funds withdrawn from a tenancy by the entirety account continues to be
tenancy by the entirety property. The Court of Appeals noted that some courts follow the
Arkansas approach, which states that, where one account owner withdraws funds from a
tenancy by the entirety account or simply removes the other party’s name from the joint
account, the other party’s interest in the affected funds ends. See id. (citing McEntire, 590
S.W.2d 241; Bealert v. Mitchell, 585 S.W.2d 417 (Ky. App. 1979)). Other jurisdictions
follow the Pennsylvania approach, under which funds removed from tenancy by the
entirety accounts continue to be tenancy by the entirety property. See id. (citing Matter of
Morrow’s Estate, 570 P.2d 912 (N.M. 1977); Madden, 200 A. 624).

      The Court of Appeals, adopting the Arkansas approach, reasoned that for Mr.
Mays to have given the trailer to Mrs. Mays as a gift, he must first have had an interest in
                                             8
the property. Id. at 351. Mr. Mays intended the trailer to be the gift, not the funds used to
purchase it. Thus, Mrs. Mays had acted as her husband’s agent when she paid for the
trailer, and Mr. Mays’ (and thus the bank’s) interest in the trailer existed before the
certificate of origin was issued to Mrs. Mays. Id. at 351–52. Accordingly, Mrs. Mays
took the trailer subject to the bank’s security interest. Id. at 352.

       In Grahl v. Davis, 971 S.W.2d 373 (Tenn. 1998), this Court did not overrule Mays
but noted that Mays was inconsistent with Sloan and Griffin. Id. at 379 n.3. In Grahl, the
issue was whether a conservator had violated her fiduciary duties; the case did not
concern the legal status of funds withdrawn from a tenancy by the entirety account. Id. at
379. In a footnote, the Court briefly summarized Mays, Griffin, and Sloan and
commented that “Mays appears to be inconsistent with this Court’s prior decisions.” Id. at
379 n.3 (quoting Griffin, 632 S.W.2d at 536 (internal quotation marks omitted)).

        The Court of Appeals in In re Estate of Grass, No. M2005-00641-COA-R3-CV,
2008 WL 2343068 (Tenn. Ct. App. June 4, 2008), determined that Mays was inconsistent
with the Supreme Court’s prior decision in Sloan. Id. at *14 (quoting Grahl, 971 S.W.2d.
at 379 n.3). In Grass, the Court of Appeals considered whether the probate court erred in
classifying as a fraudulent conveyance funds the decedent wife had withdrawn from a
joint account with her husband and placed in two accounts payable to her children upon
her death. Id. at *6, *12. The intermediate appellate court remanded the case to the
probate court to determine how the decedent and her husband held the bank account, and
if they held the account as tenants by the entirety, whether the money withdrawn by one
spouse continued to be held as tenants by the entirety property. Id. at *13. The Court of
Appeals ruled that, if the probate court determined that the decedent and her husband
held their joint bank account as tenants by the entirety, then the withdrawn funds were
impressed with the entirety provision. Id. at *14. Further, the Court of Appeals held that a
tenancy by the entirety can be terminated only when both spouses convey, when one
spouse dies and the survivor becomes owner of the whole, or when the parties divorce
and become tenants in common in the property. Id. (quoting White v. Watson, 571
S.W.2d 493, 495 (Tenn. Ct. App. 1978)). Therefore, if the joint account was held as a
tenancy by the entirety and the husband did not agree to the transfer of the funds, then
upon the decedent’s death, the funds vested to the husband, not to the decedent’s
children. Id. (citing Sloan, 241 S.W.2d at 507). By relying on Sloan, the Court of Appeals
implicitly adopted the Pennsylvania approach while rejecting Mays and the Arkansas
approach.

     The Pennsylvania approach was first stated by the Pennsylvania Supreme Court in
Madden v. Gosztonyi Sav. & Trust Co., 200 A. 624 (Pa. 1938):

       Where a deposit is made payable to either spouse, agency or authority
       exists by implication, and the husband or the wife may, from that authority,
       withdraw the entire account, but the money thus withdrawn is impressed
                                             9
       with the entirety provision that it is the property of both, and any one
       dealing with such specific property as severalty, knowing it belongs to
       both, must submit to the consequences.

Id. at 631, quoted in Sloan, 241 S.W.2d at 507. The Madden court reasoned that “either
spouse presumptively has the power to act for both . . . without any specific
authorization, provided the fruits or proceeds of such action inures to the benefit of both
and the estate is not terminated.” Id. at 630–31. Neither party may destroy the “true
purpose” of the estate by the entirety by attempting to convert it or a part of it, in bad
faith, into an estate held in severalty. Id. at 631.

        This approach taken by the Pennsylvania courts has been followed by the courts of
other states. See, e.g., Moser v. Moser, 287 A.2d 398, 400 (Del. 1972) (holding that
property acquired with joint funds remains the joint property of the spouses even if title is
taken in the name of one spouse); Morrison v. Potter, 764 A.2d 234, 238 (D.C. App.
2000) (finding that unilateral withdrawal of funds from a joint bank account does not
defeat a tenancy by the entireties estate because each spouse acts as the other’s agent and
consents in advance to each other’s withdrawal); Ambruster v. Ambruster, 31 S.W.2d 28,
37 (Mo. 1930) (finding that a joint account allowing either co-owner to withdraw funds
raises a presumption or inference that the joint interest follows the funds and does not
result in a severance of the funds from the joint estate).

       While the Pennsylvania approach protects the surviving spouse’s ownership
interests, the Arkansas approach allows for the unilateral termination of the tenancy by
the entirety. Under the Arkansas approach, “[f]unds withdrawn or otherwise diverted
from the account by one of the tenants and reduced to that tenant’s separate possession
ceases to be a part of the estate by the entireties.” McEntire, 590 S.W.2d at 244 (citing
Black v. Black, 135 S.W.2d 837 (Ark. 1940); McGuire v. Benton State Bank, 342 S.W.2d
77 (Ark. 1961)). In McEntire, the decedent held an individual checking account and
obtained a new signature card for his wife, permitting either to withdraw funds from the
account but retaining the account only in Mr. McEntire’s name. Id. at 242. Both Mr. and
Mrs. McEntire occasionally withdrew funds from the account on his or her individual
signature. Mr. McEntire had a new signature card issued in his name only, ending Mrs.
McEntire’s authority to withdraw funds from the account. Under a then-applicable
Arkansas statute, bank accounts held in the names of persons who designate themselves
as husband and wife are held by the married couple as tenants by the entireties, and upon
the death of one of the persons, the account is payable to the survivor. Id. at 244 (citing
Ark. Code Ann. § 67-552). The statute further provided that the banking institution shall
pay withdrawal requests and otherwise deal in any manner with the account upon the
direction of any one of the persons on the account. Id. (citing Ark. Code Ann. § 67-552).
The Arkansas Supreme Court held that when funds are withdrawn by one of the tenants
and reduced to that tenant’s separate possession, those funds cease to be part of the estate

                                             10
by the entireties. Id. (citing Black, 135 S.W.2d at 840; McGuire, 342 S.W.2d at 78). The
Arkansas Supreme Court ruled for the estate and the bank. Id. at 245.

        The Arkansas Supreme Court re-affirmed this ruling in Cloud v. Brandt, 259
S.W.3d 439 (Ark. 2007), where a husband withdrew funds from a joint checking account
held with his wife as tenants by the entirety, deposited the funds into a separate checking
account in his name, and then purchased certificates of deposit with funds from his
individual account. Id. at 440–41. When the husband died, the wife sought a declaratory
judgment that the certificates of deposit belonged to her as the surviving tenant of a
tenancy by the entirety in the joint funds. Id. at 441. The Arkansas Supreme Court held
that, because one spouse is not required to obtain the other spouse’s consent to withdraw
funds from a tenancy by the entirety account, the decedent did not need to obtain the
other spouse’s consent to destroy the tenancy by the entirety in the joint account and
could do so unilaterally. Id. at 444. As the surviving tenant by the entirety, the wife was
entitled to only the balance of funds in the joint account at the time of her husband’s
death.

       Several jurisdictions follow the Arkansas approach. See, e.g., In re Estate of
Vogel, 684 N.E.2d 1035, 1038 (Ill. App. Ct. 1997) (holding that a party to a joint bank
account who withdraws all the funds from the account is not liable to the other joint
depositors for the withdrawn funds); Casagranda v. Donahue, 585 P.2d 1286, 1288
(Mont. 1978) (holding that either owner of a joint bank account can acquire the whole
account by withdrawing it during the lifetime of the co-owner or by survivorship); Rose
v. Hooper, 122 N.W.2d 753, 759 (Neb. 1963) (finding that the withdrawal of funds from
a joint account destroys joint ownership in the funds and property purchased with the
withdrawn funds, regardless of the consent of the other joint owners and reinvestment by
the person withdrawing the funds in property owned individually or with others); In re
Estates of Beisbier, 177 N.W.2d 919, 923–24 (Wis. 1970) (holding that a wife’s estate
had no claim to bonds purchased from joint checking account and owned solely by the
surviving husband, noting that a joint checking account is more “a shared wallet than a
shared investment”).

       In our view, the Arkansas approach reflects the better approach in light of our
current banking environment. When either spouse is authorized to withdraw funds from a
joint bank account (as indicated on the signature card), this grant of authority reflects the
basic trust a husband and wife have in each other.3 Each spouse fully expects the other
spouse to make regular withdrawals from the account without the need for approval by
        3
         There is no allegation or evidence that Mr. Fletcher acted fraudulently by withdrawing $100,000
from the joint account or by placing the certificate of deposit in his individual name. Therefore, we need
not address the status of funds withdrawn from a joint account by one spouse under circumstances
suggesting an intent to defraud, to avoid creditors, or to defeat the interests of a spouse in anticipation of
divorce.

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the non-withdrawing spouse in every transaction. Under the Arkansas approach, the
funds, once withdrawn, cease to be entireties property. The legal status is clear, and all
parties know their respective positions.

       The Pennsylvania approach does not provide the needed clarity and finality
necessary in the banking arena. This approach arguably leads to uncertainty in banking
transactions and may often result in tracing joint funds long after the funds have been
spent. As a practical matter, it is difficult, if not impossible, for the third party receiver of
such funds to know of the entireties source or character of the funds, resulting in the
possibility that the non-withdrawing spouse could later object to the earlier withdrawal.
One could certainly be swayed by equity to side with the Pennsylvania approach when
the withdrawn sum is rather large as in this case. However, the sum involved must not be
determinative and instead must give way to the clarity and certainty provided by the
Arkansas approach. Whether the withdrawal was $100 or $100,000, the policy
considerations must be consistent. To the extent that Sloan, Griffin, Grahl, and In re
Estate of Grass are inconsistent with this opinion, they are overruled.

                                              III.

       We adopt the Arkansas approach and hold 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. When Mr. Fletcher withdrew funds from the Fletchers’ joint account,
those funds ceased to be property held by the entirety. The certificate of deposit
purchased with the withdrawn funds and issued to Mr. Fletcher individually belonged
only to Mr. Fletcher. When he died, the certificate of deposit became part of Mr.
Fletcher’s estate and did not pass outside the estate to his surviving spouse. Accordingly,
we reverse the decision of the Court of Appeals and remand to the trial court. Costs of
this appeal are taxed to appellee, Nelda Karene Fletcher, for which execution may issue if
necessary.



                                            _______________________________
                                            SHARON G. LEE, JUSTICE




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