Part III - Non-Probate Transfer

For the last portion of our blog on payable on death or totten trust accounts (a form of trust in the U.S. in which a settlor places money in a bank account or security with instructions that upon the settlor's death, whatever is in that account will pass to a named beneficiary), we will talk about the Court of Appeal's decision on the petitioner and appellant's appeal regarding the probate court's ruling to sustain the objectors'sand respondents' demurrer and opposition.

In the Estate of Gardner, the petitioner appealed the probate court's ruling stating that she had pleaded sufficient facts to survive a general demurrer. During the appeals process, the Court of Appeal stated that on a demurrer, the court must accept the petitioner's factual allegations wherein she stated that she "is informed, believes and thereon alleges the POD terms were maintained as part of the transfer to Wachovia." However, the facts that are alleged in a petition are not necessary the actual facts of a case or the facts that would have been determined by a judge. Thus, it is important to realize that the facts relied on in the opinion are not necessarily the actual facts of a case.

These allegations in the pleadings were deemed sufficient to support a cause of action; accordingly, the trial court's order was reversed. With regard to the oral trust, the court found that petitioner's allegations that the Decedent had orally declared that Wachovia hold the money in trust for his mother and sister at the same time he delivered the monies into the account' are sufficient to show that the Decedent had the requisite intent to establish a trust.

The Court therefore concluded that the Petitioner had sufficiently pleaded facts to survive a general demurrer, and thus, reversed the probate court's decision with costs on appeal awarded to the petitioner. What is interesting is that this just means that the case can go forward. There are many times that a party wins on an appeal of a demurrer but loses once a fact finder considers the evidence in a case. This is an important case that may have ramifications for many other probate, trust and estate cases invovling Payable on Death Accounts, Transfer on Death Accounts and Joint Tenancy Accounts (including banking and investments accounts).

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

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