Non-Probate Transfer

The Estate of Gardner, Jr. (187 Cal.App.4th 543 (2010)) involved the disposition of assets through a nonprobate transfer. Accordingly, the Probate Code does not govern these kinds of transfers. Instead, relevant nonprobate transfer statute at issue is the "Uniform TOD (Transfer on Death) Security Registration Act" (§ 5500 et seq.) (UTSR Act).

The Decedent died intestate (without a will) in October 2006. In January 2009, the mother of decedent, petitioner and appellant filed a first amended petition to determine the ownership of the decedent's property. She listed the persons with possible interests in the decedent's property as herself, the Decedent's sisters, the Decedent's minor daughter, one of the Decedent's ex-spouse who was the minor's daughter's legal guardian, the Decedent's son, and another of the Decedent's ex-spouses and the legal guardian of the Decedent's son.

In her petition, the mother of the Decedent Adria alleged that the Decedent received settlement proceeds of approximately $2.5 million from a personal injury lawsuit. Approximately $2 million of these proceeds were deposited equally into an Atlas Funds and Wells Fargo accounts. The Petitioner in her Petition to Determine Ownership of Decedent's Property also further alleged that the Decedent executed the necessary documentation for the Atlas account to be registered as a 'payable on death' (POD) account, with her and the Decedent's sister as equal beneficiaries of the account in the event of his death. The Petitioner also declared that the Decedent wanted to set up the same type of account for the Wells Fargo account.

In September 2006, the Decedent transferred all the money from both accounts into a Wachovia Securities account. The petitioner alleged that the decedent expressed an intent that the funds be held for the benefit of his mother and sister. Based on the discussion with the Decedent, a Wachovia staff allegedly prepared an 'Application for Registration of Account in Beneficiary Form Transfer on Death Direction," which would confirm that the Petitioner and the Decedent's sister were equal beneficiaries of the Wachovia funds. However, the Decedent died before he had a chance to sign the application.

This raises important questions regarding carrying out the intent of the decedent. The twist is that this is not a transfer through a will or through a trust but is a non-probate transfer of an asset, a multiple-party account. Multiple party accounts include joint banking accounts, payable on death (POD) accounts, transfer on death (TOD) accounts and totten trusts.

Tune in for more on this topic on subsequent blog.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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