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In re Estate of Blake

September 02, 2004


Appeal from the Superior Court of the District of Columbia (Admin. No. 1094-00) (Hon. Cheryl M. Long, Trial Judge).

Before Ruiz and Glickman, Associate Judges, and Ferren, Senior Judge.

The opinion of the court was delivered by: Glickman, Associate Judge

Argued February 6, 2003

In the course of proceedings to probate the 1995 Last Will and Testament of Josephine Blake, a District of Columbia domiciliary who died on June 2, 2000, the decedent's brother, appellant Oliver Blake, Jr., asserted that he was entitled to the ownership of certain financial assets to which the Estate also laid claim. Among these disputed assets were three Maryland bank accounts -- a savings account, a checking account, and a certificate of deposit account -- that were jointly titled in the decedent's and appellant's names with rights of survivorship expressly set forth in the account agreements. After an evidentiary hearing, the trial court determined that these accounts were assets of the decedent's estate and therefore subject to the terms of her will. In reaching that conclusion, the court ruled that the issue before it was governed by the law of the decedent's domicile, i.e., the District of Columbia, rather than the law of the jurisdiction, Maryland, in which the accounts were opened. The court further ruled that the decedent had not made an inter vivos gift of the accounts to appellant but instead had added appellant's name to her accounts merely for convenience.

In this court, appellant challenges each of those rulings. Appellant contends that because the accounts were opened in Maryland, and the bank agreements state that they are subject to Maryland law, the law of Maryland takes precedence over that of the District of Columbia and entitles him to retain the accounts by virtue of the fact that he was the surviving joint account-holder. Appellant further contends that even if District of Columbia law controls, he owns the bank accounts because the decedent made an inter vivos gift of them to him when she added his name to the accounts in 1994 or 1995.

We reject appellant's specific legal contentions. The trial court's decision on the choice of law issue is in accordance with binding precedent, and its factual finding that the decedent did not make an inter vivos gift of her bank accounts to appellant is supported by the evidence and certainly not clearly erroneous. However, we cannot simply affirm the judgment on appeal. The parties and the trial court were not apprised of an important statutory alteration of the common law in this jurisdiction that took effect on April 27, 2001, three days before the court rendered its decision. The District of Columbia Uniform Non-probate Transfers on Death Act of 1999 provides that transfers of funds pursuant to right of survivorship provisions in joint bank accounts are non-testamentary and not subject to estate administration. This change in the law is intended to effectuate the passage of funds in a joint account to the remaining account holders upon one joint owner's death outside of probate even though no inter vivos gift was made. As a result of this change, appellant's claim of ownership based on the provisions of the account agreements may be meritorious even though appellant failed to cite the right statutory authority in support of it. Since the parties in this case did not address the impact of the Act in the trial court, we are constrained to remand for consideration of whether there is any reason why it should not be applied.

Choice of Law

In the trial court, appellant grounded his claim on the Multiple Party Accounts Statute enacted in Maryland in 1992 and codified in the Annotated Code of Maryland in § 1-204 of the Financial Institutions Article and § 1-401 of the Estates and Trusts Article. That legislation changed Maryland common law governing the disposition of multiple-party bank accounts upon the death of one of the parties by "releas[ing] courts from the gift and trust tests for determining where funds should go." Hartlove v. Maryland Sch. for the Blind, 681 A.2d 584, 600 n.16 (Md. Ct. Spec. App. 1996), vacated and remanded for reconsideration on other grounds, 690 A.2d 526 (Md. 1997) (internal quotation marks and citation omitted). In lieu of such tests, the law of Maryland now allows non-testamentary transfers on death to surviving account holders in accordance with the express terms of the account agreements or as the default rule when the agreements are silent on the issue. See MD. CODE ANN., FIN. INST. § 1-204 (a), (d) (2003).

Appellant argues that if the Maryland Multiple Party Accounts Statute conflicts with the law of the District of Columbia, choice of law principles require us to determine his rights in accordance with the Maryland law. Since the more recent legislation in the District of Columbia is designed to accomplish the same thing as the Maryland legislation did, there appears not to be a genuine conflict at the present time between the relevant laws of the two jurisdictions. We need not explore that question further, though, because either way, precedent requires us to decide this case in accordance with District of Columbia law. We resolved the choice of law issue that appellant raises here in a recent case involving a decedent who had opened joint accounts in Virginia, which has a statute that is similar to the Multiple Party Accounts Statute in Maryland. See In re Estate of Delaney, 819 A.2d 968, 989-90 (D.C. 2003). Finding "a clear conflict" between the Virginia law and the common law of the District of Columbia,*fn1 we held that in a District of Columbia probate proceeding, "the District's interests are substantially stronger, and its law governs."*fn2 Id. We therefore affirmed the trial court's decision to apply the law of the District of Columbia to determine whether the Virginia joint accounts were part of the estate in the probate proceeding before it.

If a choice has to be made in the present case between applying the law of the District of Columbia and that of Maryland, Delaney is controlling. We follow its holding and apply District of Columbia law to determine the ownership of the Maryland joint bank accounts at issue here.

Ownership of the Accounts Under District of Columbia Law

The inclusion of a right of survivorship in an agreement for a joint bank account or similar instrument ordinarily does not meet testamentary requirements. Hence at common law such a provision was not enforceable in probate upon the death of one of the parties to the account. Funds contributed to the account by the decedent were treated as assets of the decedent's estate unless the survivor-claimant established ownership of the funds by virtue of a valid inter vivos gift. These principles found expression in the District of Columbia in the longstanding common law rule that when a party opens a joint account for herself and a second party without consideration, the account is presumed opened for the convenience of the first party, even where the account is specified to be a joint account with right of survivorship. The burden of proof to overcome that presumption was on the party claiming a gift, and when that claim was first asserted after the alleged donor had died, it had to be proved by clear and convincing evidence. See Delaney, 819 A.2d at 990; Davis v. Altmann, 492 A.2d 884, 885 (D.C. 1985).

In 2001, however, as part of the Omnibus Trusts and Estates Amendment Act of 2000, D.C. Law 13-292, the District of Columbia enacted a version of the Uniform Non-probate Transfers on Death Act.*fn3 See D.C. Code §§ 19-601.01 et seq. (Supp. 2004). Subchapter I of the Act provides that arrangements in bank account agreements and various other financial instruments for the non-probate transfer of assets upon death are now "non-testamentary." D.C. Code § 19-601.01 (a).*fn4 The effect of this change is that for such transfer arrangements to be enforceable, "the instrument does not have to be executed in compliance with the formalities for wills; nor does the instrument have to be probated, nor does the personal representative have any power or duty with respect to the assets."*fn5

Subchapter II of the Act, D.C. Code §§ 19-602.01--602.27, comprehensively addresses the issues raised under the new regime by financial institution accounts, including checking accounts, savings accounts, and certificates of deposit, in which more than one party has an interest -- so-called "multiple-party accounts."*fn6 Among other things, Subchapter II identifies different types of multiple-party accounts, recognizes the various purposes for which they might be held,*fn7 and "clarifies the 8 rights ...

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