Probate & Trust Law Section Conference Manual ... - Minnesota CLE

checking account, listing it as “In Trust For” (“ITF) for his daughter.
Subsequently, decedent prepared binders containing detailed information
as to his final affairs, which also includes a direction that the funds from
various accounts, including the ITF account, were to be deposited into the
estate account. After decedent’s death, daughter withdrew the funds and
his other children filed objections to the accountings filed which did not
include the ITF account. Transfer of the ITF account to daughter would
have been contrary to the intent of the decedent. The Court found that the
evidence presented proved by clear and convincing evidence that the
decedent did not intend to create an ITF account.
2. In the Matter of O’Connell, 951 N.Y.S.2d 28 (N.Y. App. Div. 2012).
The probate court lacked jurisdiction over wrongful conversion action
as it related to two living persons. Decedent established a Totten Trust,
naming his daughter and granddaughters as beneficiaries. Three days prior
to decedent’s death, his wife withdrew the proceeds pursuant to the power
of attorney granted by decedent. The surrogate’s court held that it is a
court of limited subject matter jurisdiction; the wrongful conversion action
is between two living persons and therefore the surrogate’s court lacks
jurisdiction.
E. Community Property
1. In re Estate of Kirkes, 295 P.3d 432 (Ariz. 2013). Arizona adopts the
“aggregate theory” of community property. Husband designated his
son from a prior marriage as the beneficiary of 83 percent of a
community-owned individual retirement account (“IRA”) and designated
Wife to receive the remaining 17 percent. Wife had previously been the
sole beneficiary on the account, which was held in Husband’s name. Wife
challenged the beneficiary designation, asking the court to award her the
entire account, or, alternatively, to increase her share based on her
community interest. In community property states such as Arizona, each
spouse has an undivided half interest in community property. The court
noted that community property jurisdictions are split on whether the
disposition of non-probate community property at death should be based
on the “item theory” or the “aggregate theory.” Under the “item theory,”
each spouse has a one-half interest in each item of community property,
whereas under the “aggregate theory” each spouse has a one-half interest
in the total community property when viewed in the aggregate. The court
decided that Arizona should adopt the aggregate theory and, as a result,
the IRA designation to son was valid (assuming that Wife had already
received her 50% share of Husband’s estate). Rather than looking at each
item of property, the court looked at the aggregate value of community
property. The court ultimately held that one spouse may designate a nonspouse
beneficiary of more than 50 percent of a community property
retirement account, as long as the other spouse receives half of the
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