The Court of Appeals in Reed v. Rowe decided on November 15, 2018, addressed how a sole retirement account would be dispersed after a marriage to the surviving spouse.
The Reeds were married on August 6, 2011. Prior to the marriage and for over fifteen years Mr. Reed held a sole retirement account designating his sister Ms. Rowe as the sole survivor.
Shortly after the marriage, the trial court found that the couple initiated a joint account and commingled funds to and from the account. This was not though the retirement account subject of the litigation.
There was some evidence that shortly after the marriage, the couple had visited the bank holding the retirement account and according to Ms. Reed paperwork was executed at that time to include her name on to the account and to replace Ms. Rowe from the account. The evidence credited by the court however was the evidence from the investment advisor who testified that no such document was ever executed nor such name-title transfer ever completed.
The trial court also found that Ms. Reed was aiding and directing Mr. Reed at the bank who was some fifty years her senior to complete forms and all within days of the marriage.
The UNTDA (Uniform Nonprobate Transfers on Death Act) provides that “[e]xcept as otherwise provided in this subchapter, on death of a party sums on deposit in a multiple-party account belong to the surviving party or parties.”
Particularly pertinent to the case here as provide:
- (a) rights at death under section 19-602.12 are determined by the type of account at the death of a party. The type of account may be altered by written notice given by a party to the financial institution to change the type of account or to stop or vary payment under the terms of the account. The notice must be signed by a party and received by the financial institution during the party’s lifetime
- (b) A right of survivorship arising from the express terms of the account, section 19-602.12 . . . may not be altered by will. As the appellate court agreed with the trial court findings that no such written instrumentality of transfer of account title was ever executed or completed, Ms. Reed was not entitled to any of the retirement funds even though the parties were legally married.
Ms. Reed also contended that Mr. Reed made an inter vivos gift of his investment account funds to Ms. Reed. The requisites elements of a valid gift inter vivos are the delivery, intention on the part of the donor to make a gift, and absolute disposition of the subject of the gift.
As the trial court found that there were no concrete and dispositive and independent evidence of gifting of the retirement account such as a transfer form directing the removal of Ms. Rowe’s name from the account and bearing Mr. Reed’s signature received by bank – no such delivery or intention was ever dispositive. Nor did Ms. Reed ever exercised dominion or control over the investment funds, used any of the funds, and thus no gifting intent could have been inferred or proven.
Retirement accounts are generally held as separate property during marriage particularly when titled separately, contributed to separately, not commingled or used for marital or joint purposes and moreover the spouse has not been conferred the right of survivorship via a written instrument as was the issue here.
Refer to our DC Divorce lawyer page for more information on this subject.