Bequeathed Funds Controlled by “Governing Instrument,”

Listen to this article

WI Court of Appeals – District III

Case Name: Mary Taps v. The Estate of Martin Zolondick

Case No.: 2022AP001234

Officials: Stark, P.J., Hruz and Gill, JJ.

Focus: Bequeathed Funds Controlled by “Governing Instrument,”

At the time of his death, Martin Zolondick owned checking and savings accounts at Ally Bank (“Ally”), along with a large number of certificate of deposit (“CD”) accounts. Following Martin’s death, Ally transferred approximately $256,000 from those accounts to Mary Taps, consistent with the beneficiary designations shown in Ally’s internal records. Martin’s estate (“the Estate”) subsequently challenged the distributions to Taps, and the circuit court concluded that the funds in question should be remitted to the Estate.

Taps appeals, arguing that the circuit court erred by concluding that the funds in question were not controlled by a “governing instrument,” as that term is defined in WIS. STAT. § 854.01(2) (2021-22). Taps further argues that the relevant governing instruments “effectively dispose[d] of” the funds in Martin’s accounts because there is competent evidence showing that Martin intended that money to be distributed to Taps upon his death. See WIS. STAT. § 854.07(3). Accordingly, Taps asserts that Ally properly distributed the funds to her.

The appeals court rules that the circuit court erred with respect to Martin’s checking and savings accounts. Those accounts were subject to governing instruments, as there is competent evidence that Martin intended to create payable on death (“POD”) accounts. The governing instruments effectively disposed of the funds in the checking and savings accounts because there is competent evidence that Martin intended the money to be distributed to Taps following his death. The appeals court reverses that portion of the court’s judgment requiring the funds from the checking and savings accounts to be remitted to the Estate. The appeals court remands for the court to determine the amount of money to which Taps is entitled from those accounts and to award Taps that amount.  Finally, the appeals court concludes, however, that the circuit court properly determined there was no competent evidence of Martin’s intent regarding the disposition of the funds in the CD accounts.

Affirmed in part, reversed in part and remanded.

Decided 07/18/23

Full Text