I just read a fun and interesting court opinion by Judge Paula Ott regarding the Estate of John J. Strahsmeier. Of course, what I find “fun and interesting” would be considered “insufferably boring” by 99.99% of the U.S. population. There is just no accounting for taste.
Some people find it fun and interesting to stick their heads under water to see how long before they lose consciousness. Others find it fun and interesting to hang out by a hole in the ice on a frozen lake hoping a frozen fish will bite a frozen bait. At least reading court opinions is not generally dangerous unless I get so engrossed that I do not hear my wife paging me.
What I found fun in the Strahsmeier case, apart from the cool name, is the voyeuristic pleasure of reading about a bitter family dispute. So far, the battle between a son, John T., and his two sisters, Rose Regan and Lois Phillips, has resulted in four and a half years of litigation. The legal fees are probably approaching the amount at stake, $148,000, but they are not fighting over the money. They are fighting over who received better birthday presents as children and who was most favored by the parents. However, the legal question of who gets the money is the interesting part.
The bulk of John J.’s money was in an account designated “ITF Rose Regan.” An in-trust-for (ITF) account, like a pay-on-death (POD) or transfer-on-death (TOD) account, passes on the account owner’s death to the trust beneficiary. This result may be overcome by clear and convincing evidence that the account owner did not intend for the money to go to that person. Joint bank accounts present similar problems.
Strahsmeier’s daughters, Rose and Lois, agreed that the money should be Rose’s. John T. argued that his father put Rose’s name on the account just for convenience, so it should be part of the probate estate. The probate estate would pass according to the will and be split evenly.
It is usually hard to show clear and convincing evidence to overcome the the ITF designation, but John J. had detailed notebooks backing up his will. These made it clear that he wanted all three of his children to share the funds in the ITF account. That John T. won was an uncommon result in a very common situation.
Joint, ITF, POD, or TOD accounts that conflict with the estate plan in a will or trust show up in most decedents’ estates. The heirs typically agree on how the account should be handled. In other cases, there is not enough at stake to fight over. Rarely is there litigation. However, there are always emotional – if not physical – bruises no matter how the matter is resolved. The saddest aspect is that the problem could be avoided if account holders ask an attorney instead of a bank teller how to set up their bank accounts.
Bank, brokerage, retirement, and other accounts must be set up in conformity with the broader estate plan. A bank teller or financial employee may understand his or her products, but does not know how the over all plan is intended to work. A will or trust must never be executed without the assistance of an attorney. At the time the will or trust is signed, the attorney should explain how to title accounts and other property.
John J. Strahsmeier had a family attorney, but apparently did not listen to him. This was unfortunate for his family, but lucky for people who find court opinions fun and interesting. The lesson to be drawn is that how accounts are titled is extremely important. To make things easier for your family do not rely on your bank teller for estate-planning advice. Otherwise your estate may give rise to another fun and interesting court opinion. For more on why even as simple and common a document as a will can have pitfalls, read “Frustrating the Intent of the Testator.”
John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com ©2012 John B. Payne, Attorney
P.S. — as noted by Billy Whiteshoes Johnson in his comment, on July 11, 2013, the Pennsylvania Supreme Court turned down the sisters’ appeal: http://www.pacourts.us/assets/opinions/Supreme/out/534WAL2012%20-%201014833101656316.pdf
P.P.S. — Judge Kathleen A. Durkin put the final nail in the appellants’ coffin on February 12, 2015 in an order entered on the estate’s motion for judgment. The motion documents the hard work and outstanding litigation of the estate’s attorney, Robert J. Amelio, of Pittsburgh. The order is at the end of this 101-page document: strahsmeier john order 02122015