Does creation of joint accounts with survivorship rights alter the dispositive provisions of a pre-existing last will and testament?
The question of whether, and under what circumstances, a joint, Totten, or tentative trust in bank deposits can be revoked, either expressly or impliedly, by a written or oral declaration made by the settlor during his lifetime or by the terms of the settlor’s will is often debated among probate litigators and judges. There are few appellate opinions in Florida providing clear guidance for some scenarios. However, Florida and most other states follow the rule adopted by the Restatement of Trusts 2d §58 comment (c) that a tentative trust is revoked by the depositor’s will, if, by its terms, it indicates explicitly or implicitly that the depositor intended to effect such a revocation. Litsey v. First Federal Sav. & Loan Association 243 So.2d 239 (Fla. DCA 1971) (recognizing rule.)
An interesting case dealing with this complicated issue recently surfaced in the Pennsylvania court system in Estate of Amelia J. Piet, 2008 Pa.Super. 72, 949 A.2d 886 (2008). The facts of this case were as follows:
In 1978 Edward A. Piet and Amelia J. Piet [hereinafter referred to as "Decedent"), husband and wife, executed reciprocal Wills. The Wills provided that upon the death of the first spouse, the entirety of the deceased spouse's estate would pass to the surviving spouse in fee simple. Amelia's Will provided, in relevant part, that in the event her husband predeceased her, "all the real and personal property to which [decedent] may be entitled or over which [decedent] may have disposing power at the time of [her] decease” was to pass to her four children — Mary Piet Black, Edward J. Piet, Jr., Ann L. Ball, Dennis J. Piet — “in equal shares…absolutely” and that Edward and Ann would serve as co-executors. 1986, Edward A. Piet passed away and his entire estate was bequeathed to the Decedent. Shortly thereafter, Decedent was crippled with various illnesses. Mary, who had a background as a medical secretary, assisted Decedent with her medical needs. Edward, an employee of Conrail railroad, helped Decedent administer her deceased husband’s Conrail IRA account. Ann, who had worked in banking for several years, conducted Decedent’s financial affairs.
During the course of the Decedent’s illness, the attorney who drafted the Decedent’s 1978 Will contacted her by letter asking her whether any circumstances had arisen since 1978 which would necessitate changes in the Decedent’s estate plan. She did not change her Will. Amelia died in 2004 and an inventory of her estate was filed listing a total of $19,899.37 in assets. After a petition to remove the personal representatives (Edward and Ann) was filed, they filed a supplemental inventory which listed a total of $98,400.57 in assets. Subsequently, they filed another inventory listing a total of $77,045.56 in liquid assets. As expected, these inconsistent inventories invited a lawsuit in the probate court brought by the other two children.
The basis of the probate lawsuit was that the personal representatives acted improperly by refusing to include the proceeds of ten different joint accounts, which were listed in the inheritance tax return, as part of Decedent’s estate. (The total value of these accounts was $177,239.27, a sum representing the bulk of the decedent’s estate.) Importantly, eight of the accounts were jointly titled in Decedent and Ann’s names and the remaining two accounts were jointly titled in Decedent’s and Edward’s names.
At the probate hearing, evidence was adduced pointing to the conclusion that the accounts were set up as convenience accounts and that the Decedent desired to treat all her children equally. After hearing, the probate court concluded that certain assets from these accounts should be excluded from Decedent’s estate and should pass to the co-owners and were not revoked by the Will. As expected, there was an appeal that worked its way through the Commonwealth’s judicial system and arrived at the Superior Court. Initially, the court observed that there was no evidence indicating the Decedent intended the joint accounts to be inter vivos gifts, but rather, that they were joint accounts set up for convenience after a Will was executed, and that virtually all of the decedent’s assets were included in these accounts. (This occurs frequently in Florida, too.)
The appellate court then pointed out that Pennsylvania’s probate code streamlined the distribution of joint bank accounts by creating a presumption that upon the death of one joint account holder a right of survivorship is created in favor of the surviving joint account holder(s). The court also observed that this statutory scheme and presumption is consistent with Uniform Probate Code (UPC) §§1-102(b) (2) (3), noting that the purposes of the UPC include, inter alia, “to discover and make effective the intent of the decedent in distribution of his estate” as well as “to promote a speedy and efficient system for liquidating the estate of the decedent and making distribution to his successors.” Specifically, the Pennsylvania probate code was fashioned after section 6 of the Uniform Probate Code (UPC), providing for non-probate transfers.
The court believed that there should be an ownership presumption that applies to a joint account, “unless there is clear and convincing evidence of a different intent at the time the account was created. A right of survivorship arising from the express terms of an account or under this section, or a beneficiary designation in a trust account cannot be changed by Will.” (Emphasis added.) The Court also observed that the intentions expressed in the Decedent’s Will in this matter were clear–each child was to inherit one-quarter of the Decedent’s entire estate:
If my husband, EDWARD A. PIET, shall predecease me, or if he and I shall die simultaneously or as the result of a common accident or catastrophe or under such circumstances as to render it difficult or impossible to determine with certainty whether he survived me, then, and in any of said events, I give, devise and bequeath all the real and personal property to which I may be entitled to or over which I may have disposing power at the time of my decease to my four children, EDWARD J. PIET, ANN L. BALL, DENNIS J. PIET AND MARY A. PIET, equally and in equal shares, or unto the survivor of them, absolutely.
Because there was no evidence that Decedent’s Will was ever revoked or altered in any manner, the court held that it could not apply the presumption of ownership in the surviving joint holder.
I believe that this is a just and proper result. I agree that under certain circumstances, the creation of joint accounts with survivorship rights after execution of a Will should not be allowed to alter the Will. This is consistent with the overall goal of our probate codes: to effectuate the testator’s intent. To apply the presumption of ownership in the surviving joint holder would revoke the pre-existing Will in a manner not allowed under the will revocation statute.