Summary
observing that a gift is "wholly inoperative unless accepted by the donee"
Summary of this case from In re MerrillOpinion
No. 4483.
Argued May 1, 1956.
Decided May 31, 1956.
By virtue of statute (RSA 384:28) a surviving tenant of a joint bank account, maintained by one person in the names of himself and another and payable to either of them or the survivor, has the right to ownership thereof free from claims of the heirs or creditors of the deceased tenant irrespective of whether any assets passed to the latter's estate at the time of his death.
The survivor's right to the account however is subject to avoidance if the account was established by the deceased for the purpose of defeating the rights of his wife or his creditors or in violation of the Fraudulent Conveyances Act.
While a joint account established in accordance with the statute (RSA 384:28) becomes the "property of . . . the survivor" and the survivor is entitled to immediate possession upon the death of the other, a waiver of the right to the account seasonably made operates as an effective disclaimer and relates back to the date when the account was established and hence the account is part of the deceased tenant's estate.
As such, an assessment of the legacy and succession tax upon the account (RSA 86:8) is subject to the authorized deductions (Ib., s. 44).
CERTIFICATION, of question of law to the Supreme Court by the probate court of Cheshire County, pursuant to RSA 547:30.
From the agreed statement of facts filed by the parties it appears that Alanson C. Flint executed his will on February 19, 1954, naming Homer S. Bradley as executor and leaving all of his property after payment of debts, funeral bills and expenses of administration to his sister-in-law, Gladys L. Babcock. In August, 1954, he sold substantially all his real and personal property and deposited the proceeds in two savings accounts in his name. Thereafter, these accounts, totalling $5,700, were changed to joint accounts payable to Flint or to his sister-in-law or the survivor of them. At the time of his death on November 20, 1954, the testator's estate, aside from these two accounts, consisted of cash, miscellaneous articles and another savings account from all of which the sum of $379.48 was realized by the executor.
"On the day of the testator's death, the bank books representing the said savings accounts were found by Gladys L. Babcock with a copy of the will among the effects of the decedent. On that same day, Gladys L. Babcock assigned the said bank books to Homer S. Bradley as executor . . . thereby waiving her statutory right to claim said deposits as surviving joint tenant, and for the purpose of carrying out the terms of the will." The will was duly probated and an inventory was filed in which the status of the savings accounts was fully described. Withdrawals were made from the accounts for payment of the funeral bills, debts of the decedent and expenses of administration. A final account was filed showing total assets, including the joint savings accounts, in the sum of $6,079.48, expenditures of $1,771.81 and a balance of $4,307.67 on which the executor paid the legacy and succession tax. "The director of the inheritance tax division of the State Tax Commission assessed a tax . . . on the total sum of the two savings accounts" amounting to $5,700. From this assessment (RSA 86:39) the executor appealed to the probate court. RSA 86:47.
The court transferred the following question: "Is the estate entitled to the deductions as provided by section 44 of chapter 86, RSA, in the determination of the legacy and succession tax assessed upon the assets of said estate including the $5,700 in joint savings accounts assigned to the executor by the surviving joint tenant and accounted for in the final account of administration as an asset of the estate?"
Homer S. Bradley (by brief and orally), as executor, pro se.
Warren E. Waters, Deputy Attorney General (by brief and orally), for the State of New Hampshire.
If the surviving tenant of an estate in joint tenancy is "any person . . . except . . . the husband, wife, father, mother, lineal descendant, or adopted child of" the deceased cotenant (RSA 86:6), his right to the immediate ownership of the property is specifically subjected to the legacy and succession tax of this state by the following provisions of RSA ch. 86:
"86:8 JOINT OWNERSHIP. Whenever property, real or personal, is held in the joint names of two or more persons, or is deposited in banks or other depositaries in the joint names of two or more persons and payable to either or the survivor, upon the death of one of such persons, the right of the survivor to the immediate ownership or possession and enjoyment of such property shall be deemed a transfer taxable under the provisions of this chapter, in the same manner as though the whole property to which such transfer relates was owned by said parties as tenants in common and had been devised or bequeathed to the survivor by such deceased joint owner.
"86:9 MEASURE OF SHARES. To the extent that such joint account or property is acquired by the use of the funds of the persons to whom it is payable, or by whom it is held, the value of the separate interest of each for the purposes of this chapter shall be measured by his proportionate contribution to the fund or to the purchase price of the property."
Since the surviving joint tenant in this case was the sister-in-law of the deceased cotenant and contributed nothing to the accounts in question, a tax upon the full amount of the accounts is imposed by this statute unless, as the plaintiff contends, the sister-in-law, by assigning the accounts to the executor and "thereby waiving her statutory right to claim said deposits as surviving joint tenant," caused the funds to revert to and become a part of the decedent's estate.
The accounts in question were created by the deceased tenant during his lifetime with his own funds and the now surviving tenant had no knowledge of their existence until the day of the cotenant's death. Formerly, such deposits were not effective to give the survivor any ownership or interest in the accounts. Nashua Trust Co. v. Mosgofian, 97 N.H. 17, 19. They now, however, become "the property of . . . the survivor" by virtue of the statute adopted here in 1953 (RSA 384:28-32) which provides in part as follows:
" 384:28 ON DEATH OF DEPOSITOR. Whenever any account shall be maintained in any bank doing business in this state in the names of two persons payable to either of such persons, and payable to the survivor of them, the said account shall upon the death of either of said persons become the property of and be paid in accordance with its terms to the survivor, irrespective of whether or not the funds deposited were the property of only one of said persons, and irrespective of whether or not at the time of the making of such deposits there was any intention on the part of the person making such deposit to vest the other with a present interest therein, and irrespective of whether or not only one of said persons during their joint lives had the right to withdraw such deposit, and irrespective of whether or not there was any delivery of any bank book, account book, savings account book, certificate of deposit, or other evidence of such an account, by the person making such deposit to the other of such persons.
" 384:31 CONSTRUCTION. Nothing contained in this subdivision shall be construed to prohibit the person making such deposit from withdrawing or collecting the same during his lifetime, nor shall the fact that such person had the right to withdraw or collect said deposit during his lifetime operate to defeat the rights herein provided for the person or persons surviving such depositor."
As to bank accounts maintained by one person in the names of himself and another and payable to either of them, or the survivor, this statute removed the presumption against an intention to create joint interests in them, the burden of overcoming which was formerly placed upon the surviving tenant (Dover c. Bank v. Tobin, 86 N.H. 209, 210) and eliminated "any question of the right of the survivor . . . to ownership and payment of the account `upon the death of either of said persons.'" Cournoyer v. Bank, 98 N.H. 385, 393.
By virtue of this statute a surviving tenant has the right to the ownership of the account free from the claims of the heirs or creditors of the deceased tenant, (48 C. J. S. 910, 911) regardless whether any assets pass to the latter's estate at the time of his death. This right to the account however is subject to avoidance the acts of the deceased tenant in establishing the joint estate were undertaken by him in order to defeat the rights of his wife (Ibey v. Ibey, 93 N.H. 434, 435) or those of his creditors, or were done in violation of RSA ch. 545, the Fraudulent Conveyances Act, none of which factors are involved here. Except as the right is so voided, the surviving tenant has no duty to provide from the account for the payment of the deceased tenant's debts nor for the funeral bills or expenses of administration incurred by his estate.
The statute does not operate, however, to make the surviving tenant the owner of the account against his consent. The heirs-at-law of an intestate estate may not disclaim or renounce their rights because the title which they receive is in no sense a gift but is one which passes to them by force of the rules of law, without the necessity of any voluntary act either on the part of the former owner who is dead, or the subsequent owner who takes by intestate succession. Bostian v. Milens, 239 Mo. App. 555. On the other hand, "a gift, however created, whether by will or inter vivos, is wholly inoperative unless accepted by the donee." Gottstein v. Hedges, 210 Iowa 272, 275. Thus, devisees or legatees take title by way of gift because of the testator's voluntary act in executing his will (anno. 170 A.L.R. 435) and have the right to prevent the passage of this title to themselves by renunciation. Perry v. Hale, 44 N.H. 363, 365. Similarly, the beneficiary of a trust may disclaim it. In either case, the renunciation or disclaimer relates back to the date of the gift with the result that title to the property which is the subject matter of the gift does not pass to the beneficiary. 1 Scott, Trusts, s. 36.1.
As to an account established in accordance with the statute (RSA 384:28), it is the act of the deceased tenant in creating the account as a joint one which brings the transaction within the provisions of the statute and causes the account to become "the property of . . . the survivor," in the same manner that it is the act of a testator or grantor of a trust in executing his will or trust agreement which gives rise to the gift. The surviving tenant's statutory right to the account is not one which he is compelled to accept.
We conclude in this case that the survivor's "right . . . to the immediate ownership" of the accounts to which the taxing statute refers (RSA 86:8) was one which she had the power to disclaim or waive. This she seasonably did on the same day that the existence of the accounts first came to her knowledge. The disclaimer related back to the date on which the accounts were established as joint ones with the result that the accounts became a part of the deceased tenant's estate. They were there subject to the deductions authorized by RSA 86:44 before determination of the legacy and succession tax.
The answer to the transferred question is "yes."
Remanded.
All concurred.