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  1. #1
    Join Date
    Oct 2016
    Location
    Lodi California
    Posts
    2

    Angry Franchise Tax Board Seized Money from My Account for Estranged Daughter's Debt

    My question involves court procedures for the state of: California

    First, thank you for this site. I hope I can find an answer to my dilemma. I'll do my best to keep it short so bear with me.

    Over ten years ago, I opened a checking account with a big named bank. I had my daughter added as an authorized signer, in the event of my incapacitation so my bills could still be paid. Nothing ever happened, though. Thank goodness.

    At the time, we were very close and she was in her right mind. Since then, her mental health has deteriorated and she's become quite irresponsible, financially speaking. On top of that, she has cut me out of her life and we haven't spoken for five years so I don't really know how she's doing.

    Today, I received a letter - or rather a form - from the bank, telling me they have taken out a sizeable amount of money to satisfy a debt (daughter's debt) owed to the Franchise Tax Board. The form didn't come with a court document attached, it had only her name, case number and a reference number. I was shocked and very upset. I have no other money than this account and they have now depleted it by two-thirds.

    I went to the bank and spoke with someone who called the legal department in Delaware (that's where this legal department is, I guess). I heard only one side of the conversation, too. Apparently, the person on the other end of the phone told this bank customer rep that it was my daughter's account. (It wasn't.) The bank rep replied back that it was "her mother's account." A few more "uh huh"(s) and "oh, I see"(s), she hung up. She hung up and she told me I should contact the Franchise Tax Board and file some sort of form to have the funds returned to me. Other than that, she offered little help in this.

    I immediately decided to close the bank account and open a new one where my name alone would be on the account. No other authorizing signatures allowed.

    This is wrong. Pure and simple. My daughter is 40 years old and chosen this life for herself. Furthermore, if there was communication from the FTB prior to this action, that money would be taken, I never received it because, as I stated, I have no contact with my daughter, whatsoever.

    What I want to know is this ... If I can't get this money back from the FTB by explaining the situation and filing their stupid form, can I sue the them, the bank and my daughter? At my age, I've had my fair share of challenges (as most of us have) but this is the final straw. I'm retired, living on social security, a couple minor health problems and too old to start over, again. I need that money. I have no way of making any extra to replenish what I lost. I need advice on what to do next. Please. I would be most grateful if someone could tell me the steps I need to take to solve this utterly ridiculous and incredibly upsetting situation. Thank you

  2. #2
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Franchise Tax Board Seized Money from My Account for Estranged Daughter's Debt

    Here is the problem: if adding her as a “co-signer” (to use your phrase) made her a co-owner of the account then the funds in that account were just as much her money as yours from a legal standpoint. In that case, the FTB may legally attach those funds to pay her tax liability, and no advance notice to you would be required. The bank is obligated to turn over funds in any account in which the taxpayer listed in the levy notice (your daughter) has any ownership and California’s tax law almost certainly immunizes the bank for complying with the levy notice, much as federal law immunizes a bank for complying with a levy notice from the IRS in similar circumstances. One of the risks of adding a relative on your account as a co-owner is exactly this problem — if that person gets into financial trouble his/her creditors may be able to take the funds in that account to pay the debts of that co-owner. So if that is what the arrangement was, that she was a co-owner of the account, then you might be stuck with no legal recourse if the FTB refuses to return the levied funds. You won’t like this but in this circumstance it was your responsibility to get her off your account once you realized she was having problems.

    But you should at least try to get the money back. Perhaps if you can prove that all the funds in the account were deposited by you and that she was only put on the account to help you should you become incapacitated it will return the funds to you.

    If on the other hand she was not a co-owner of the account but instead only had a power of attorney to act for you with regard to the account then the money in there cannot be attached for her debts and the FTB would be obligated to return the money to you. The problem is that in my experience when most people go to the bank asking that someone be added as co-signer the bank has them complete forms that make the person a co-owner of the account. It’s easier for the bank and it is usually what most people seem to want. You have to be very clear with a bank rep that the other person is to only have power of attorney to deal with the account and not be a co-owner and ensure the documents reflect that if you do not want the person to be a co-owner of the account.

  3. #3
    Join Date
    Oct 2016
    Location
    Lodi California
    Posts
    2

    Default Re: Franchise Tax Board Seized Money from My Account for Estranged Daughter's Debt

    Thank you so much for a clear explanation. For what it's worth, I am kicking myself for not changing the account five years ago. Stupidity and a foolish belief she would come to her senses, so to speak, caused me to just let it go. This is one of those cases where you don't think it will happen to you because it's your own child but hey, I guess that's just as foolish. As to your comment about proof of funds. I actually do have bank statements for the past three years where all deposits were from SS benefits. No one else ever deposited money in the account. I'll make sure to have all those available, should the FTB want to see them ... which I'm sure they will.

    Thank you again for your help.

    After speaking to an FTB rep this morning, it looks like the storm has passed. I was able to prove the funds were mine and my daughter never had a hand in any of it. I faxed the rep my bank statements showing the source of all the funds. She stopped the transfer and will be returning my money back to me. I'm relieved and thankful and have learned a valuable lesson. No matter how much you think you can trust your family, you can't. They're just people, too. And some people can be pretty awful, at times.

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