In the Matter of the Estate of Keith Dale Sasseen ( 2021 )


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  •                    IN THE COURT OF APPEALS OF IOWA
    No. 20-1279
    Filed October 6, 2021
    IN THE MATTER OF THE ESTATE
    OF KEITH DALE SASSEEN, Deceased.
    MICHELLE ALM
    and D’AN SASSEEN,
    Objectors-Appellants,
    vs.
    BARBARA SASSEEN,
    Executor-Appellee.
    ________________________________________________________________
    Appeal from the Iowa District Court for Wapello County, Myron L. Gookin,
    Judge.
    Michelle Alm and D’An Sasseen, beneficiaries of the Estate of Keith
    Sasseen, appeal the order overruling their objections to the inventory and final
    report of its executor, Barbara Sasseen. AFFIRMED.
    Kyle A. Sounhein and Noah L. Schmall of Lynch Dallas, P.C., Cedar Rapids,
    for appellants.
    Richard J. Gaumer of Gaumer, Emanuel, Carpenter & Goldsmith, P.C., and
    Michael J. Moreland of Harrison, Moreland, Webber & Simplot, Ottumwa, for
    appellee.
    Heard by Bower, C.J., and Greer and Badding, JJ.
    2
    BADDING, Judge.
    Michelle Alm and D’An Sasseen, beneficiaries of the Estate of Keith
    Sasseen, appeal the order overruling their objections to the inventory and final
    report of its executor, Barbara Sasseen. Relying upon a premarital agreement
    between Keith and Barbara, they contest Barbara’s claim of survivorship rights
    with regard to two joint bank accounts. Because Michelle and D’An failed to show
    substantial extrinsic evidence to rebut the presumption in favor of finding the
    accounts are held in joint tenancy with right of survivorship, we affirm.
    I.     Background Facts and Proceedings
    Before marrying in June 2005, Keith and Barbara executed a premarital
    agreement. Paragraph 6 of the agreement, titled “Separate Property Interests in
    Premarital Assets and Acquisitions,” provided in relevant part that “all assets
    belonging to Keith D. Sasseen at the commencement of their contemplated
    marriage, and any assets acquired by Keith D. Sasseen during that marriage by
    gift, bequest, devise, or descent, shall be and remain his separate property.” The
    same provision applied to Barbara’s premarital assets.
    In an attachment to the agreement, Keith disclosed his assets to Barbara,
    which included “Savings and Checking accounts” at Wells Fargo Bank totaling
    $35,000.00. Keith also listed his estimated retirement income from IPERS, social
    security, and investments, although he was not retired at the time of the parties’
    marriage. Barbara likewise disclosed her assets to Keith in an attachment to the
    agreement. Among her assets were “[s]tock accounts and investments” totaling
    $500,000.00. Like Keith, Barbara listed her estimated retirement income from a
    John Deere pension and investments.
    3
    After marrying, Keith and Barbara went to Wells Fargo and signed a
    document entitled “Consumer Account Application for Relationship Change” for
    each account. Under “Current Relationship,” each application names Keith as
    “sole owner”; under “New Relationship,” each application names Keith as “Prim
    JntOr” and Barbara as “Sec JntOr.” Barbara transferred funds from her checking
    and saving accounts to the Wells Fargo accounts before closing them. During the
    marriage, Keith and Barbara each deposited funds, including income from their
    employment, retirement accounts, and investments, into the Wells Fargo accounts
    and paid all expenses from them. They did not keep any accounting of the
    amounts each contributed and spent.
    Keith died in December 2018. Barbara was appointed as executor of
    Keith’s estate in accordance with Keith’s will. In the initial report and inventory,
    Barbara listed the Wells Fargo checking and savings accounts as jointly owned
    property with surviving spouse. The total value of the accounts at the time of
    Keith’s death was over $400,000.00.
    Michelle and D’An, Keith’s daughters, filed objections to the initial report and
    inventory and the final report. They claimed that under the terms of the premarital
    agreement, they are entitled to initial distributions of the $35,000.00 listed in Keith’s
    financial disclosure in the premarital agreement and a $20,910.07 inheritance
    Keith received; they concede Barbara is entitled to a distribution of $55,000.00 in
    house proceeds.      They asked the court to divide the remaining balance in
    proportion to the amount they believe Keith and Barbara contributed to the
    accounts during the marriage, with Barbara receiving 46% while they receive the
    54% attributable to Keith.
    4
    Following trial, the district court overruled and denied Michelle and D’An’s
    objections and approved Barbara’s final report. The court found the Wells Fargo
    accounts were held in joint tenancy with the right of survivorship. It also found the
    premarital agreement did not override Barbara’s survivorship rights.
    II.      Scope and Standards of Review
    Our review is de novo. See Est. of Randeris v. Randeris, 
    523 N.W.2d 600
    ,
    604 (Iowa Ct. App. 1994) (stating review of rulings on objections to an executor’s
    final report is de novo); see also In re Est. of Serovy, 
    711 N.W.2d 290
    , 295 (Iowa
    2006) (engaging in de novo review of the district court’s interpretation of a contract
    in equitable proceedings). We give weight to the trial court’s findings but are not
    bound by them. See In re Est. of Williams, 
    515 N.W.2d 552
    , 553 (Iowa Ct. App.
    1994).
    III.     Analysis
    Michelle and D’An claim the district court erred in (1) determining they failed
    in their burden to establish that Keith did not intend to create a right of survivorship
    when he added Barbara’s name to the Wells Fargo bank accounts and
    (2) concluding the premarital agreement did not override the survivorship aspect
    of the joint bank accounts.
    We begin our analysis of the first issue with the basic proposition that bank
    accounts held in joint tenancy are not part of an estate and are not devisable by
    will. See In re Est. of Kiel, 
    357 N.W.2d 628
    , 631 (Iowa 1984); In re Est. of Roehlke,
    
    231 N.W.2d 26
    , 28 (Iowa 1975). This is due to the nature of joint tenancy property,
    which has been described by our supreme court as “property held by two or more
    parties jointly, with equal rights to share in the enjoyment of the whole property
    5
    during their lives, and a right of survivorship which allows the surviving party to
    enjoy the entire estate.” In re Est. of Kirk, 
    591 N.W.2d 630
    , 634 (Iowa 1999).
    A bank account is held in joint tenancy when it is in two names and
    expressly made payable to either or to the survivor. See Roehlke, 
    231 N.W.2d at 28
    ; accord In re Est. of Lamb, 
    584 N.W.2d 719
    , 724 (Iowa Ct. App. 1998). The
    question is whether the person establishing the account intended to create a joint
    tenancy. See Lamb, 
    584 N.W.2d at 724
    . Extrinsic evidence may be admissible to
    determine intent. See Petersen v. Carstensen, 
    249 N.W.2d 622
    , 625 (Iowa 1977).
    The resulting rule[1] is that a bank deposit in the name of
    alternate payees becomes the property of the surviving payee upon
    the depositor’s death in the absence of extrinsic evidence showing
    that the depositor had a contrary intention. When substantial
    extrinsic evidence is offered in an effort to establish a contrary
    intention, an issue of fact is generated. However, when the evidence
    offered to show a contrary intention is not substantial, a joint tenancy
    exists as a matter of law.
    
    Id.
    Michelle and D’An do not really contest the joint tenancy nature of the bank
    accounts. Instead, the question before us focuses on whether Michelle and D’An
    offered substantial evidence showing that Keith intended no right of survivorship
    when he added Barbara’s name to the Wells Fargo accounts. They argue they
    overcame the survivorship presumption with the following evidence: (1) the
    1This rule stems from the Petersen court’s interpretation of Iowa Code section
    524.806 (2018), which provides in pertinent part:
    When a deposit is made in any state bank in the names of two
    or more individuals, payable to any one or more of them, or payable
    to the survivor or survivors, the deposit, including interest, or any part
    thereof, may be paid to any one or more of the individuals whether
    the others be living or not.
    See generally Petersen, 
    249 N.W.2d at
    625 (citing an earlier version of section
    524.806).
    6
    relationship change documents, which do not contain any reference to a right of
    survivorship; (2) Michelle’s testimony that Keith intended half of the bank accounts
    to go to her and D’An; and (3) the language of the premarital agreement.
    Michelle and D’An’s first argument begs the question. Under the rule set
    forth in Petersen, it is not necessary that bank documents specifically reference a
    right of survivorship. 
    249 N.W.2d at 625
    . Instead, a rebuttal presumption in favor
    of survivorship rights is created when a deposit is made in the names of two
    individuals, payable to either. 
    Id.
     That is exactly what the relationship change
    documents did here by designating Keith as “Prim JntOr” and Barbara as “Sec
    JntOr.” A long-time employee at Wells Fargo testified those designations had the
    effect of changing Keith’s accounts to “a joint account, so it’s like a primary joint
    secondary, joint/or account.” She explained a “joint/or” account means the account
    is “either/or. Somebody passes away, then it would go to the second person on
    the account.” See Williams, 
    515 N.W.2d at 554
     (relying in part on testimony from
    a bank employee in finding that the presumption of survivorship in a jointly payable
    certificate of deposit was not rebutted).
    As for Michelle’s understanding of Keith’s intent, we agree with the district
    court that her testimony alone is not substantial evidence of a contrary intent.
    Michelle testified as follows:
    Q. When was the first time you learned about the premarital
    agreement? A. Prior to their marriage, my dad had a conversation
    that because it was a third marriage for both of them, third marriage
    for Barb, third marriage for him, late in life marriage coming in with
    separate assets, out of respect to Barb’s family and out of respect
    for my sister and I, it was very important to him that we all knew a
    prenuptial agreement was going to be made so that there would be
    no concerns that assets from either of them would be going to the
    opposite family, and that was respecting . . . both families, and he
    7
    informed me that prior to the marriage, there would be a prenuptial
    agreement in place so that—it was supposed to have been followed.
    ....
    Q. . . . Did your father ever explain what he thought the
    premarital agreement did for the division of the [bank] accounts?
    ....
    A. It was my understanding that he thought everything was in
    place and the whole purpose was to avoid this and that it was, as I
    said, from what he explained, half was to go to Barb, half was to be
    split between my sister and I.
    Q. Do you believe that intent is reflected in the premarital
    agreement? A. Yes, I do.
    Michelle admitted that she did not participate in the preparation of the
    premarital agreement. And her understanding of the agreement is at odds with
    Barbara, who was a participant in its preparation. At trial, Barbara explained the
    plan that she and Keith had when they entered into the premarital agreement “was
    that what Keith brought to the marriage was going to go to his kids, and what [she]
    brought to the marriage was going to go to [her] kids . . . and everything else that
    [they] accumulated afterwards would be shared.”
    Michelle and D’An finally rely on the premarital agreement itself, which they
    argue shows Keith intended no right of survivorship in the accounts and, relatedly,
    overrides any survivorship rights that may have been created by adding Barbara’s
    name. They cite paragraph 15 of the agreement, entitled “Discharge of Living
    Expenses,” in which Keith and Barbara agreed to establish a joint account to pay
    expenses during the marriage. It states:
    The joint living expenses of the parties may be paid from a
    joint account to be established following the marriage into which each
    of the parties may contribute. . . . If any such income so deposited
    in the joint account is from a separate property interest, . . . the
    commingling of said funds shall not be construed to grant the other
    party any right, title or interest in and to said separate property not
    heretofore granted to them.
    8
    Michelle and D’An argue that Keith added Barbara’s name to his Wells Fargo
    accounts to establish the joint account for use during the marriage pursuant to
    paragraph 15 but that he intended all of their individual deposits into the account
    to remain separate. This interpretation contravenes the language of the provision
    and the agreement as a whole.
    Paragraph 15 states that if “income . . . from a separate property interest” is
    added to the joint account, it does not change the character of that property
    interest. (Emphasis added.) It does not say that all income deposited into the joint
    account remains the separate property of the depositor, as Michelle and D’An
    seem to contend. The terms of paragraph 15 are in keeping with paragraph 6,
    “Separate Property Interests in Premarital Assets and Acquisitions,” which states
    that any assets held by the parties at the commencement of the marriage and any
    acquired during the marriage “by gift, bequest, devise, or descent”—or any
    increase or appreciation of that property or purchase of assets with money derived
    from it—would remain separate.
    In contrast, paragraph 7, “Property Interests in Postmarital Assets and
    Acquisitions,” states:
    The parties agree that all assets acquired during the marital
    relationship except those described as separate property above [in
    paragraph 6] shall be considered to be acquired as a result of the
    joint effort of the parties and shall be property subject to
    apportionment to the parties by an appropriate court of dissolution in
    the event that dissolution of marriage of the parties is sought by
    either party . . . .
    While some of the deposits into the joint accounts were from the parties’
    premarital retirement accounts and investments, paragraph 13, “Interest in
    9
    Preexisting Retirement and Employee Benefit Packages,” specifically provides
    that
    [a]ny preexisting retirement or employee benefit plan held and
    existent by one party prior to the marriage shall be the separate
    property o[f] that party to the extent of the value of said interest as
    of the date of marriage. Any rents, issues, profits, increases,
    appreciation or income from said retirement or employee benefit
    plans may be deemed marital property and subject to division by a
    court of dissolution. It is anticipated that upon retirement, the
    retirement income of the parties shall be used by the parties as they
    shall decide. If any investments of funds from family income are
    made, then such amounts shall be divided as the parties shall
    decide.
    (Emphasis added.) Further, paragraph 14, “Property Transfers Between Parties,”
    allowed the parties to transfer property to one another, specifically stating: “Neither
    party intends by this agreement to limit or restrict in any way the right to receive
    any such transfer, conveyance, devise or bequest from the other after the parties’
    marriage.” See Coffman v. Adkins, 
    338 N.W.2d 540
    , 542 (Iowa Ct. App. 1983)
    (interpreting a similar provision in a premarital agreement as allowing the
    decedent’s transfer of certificates of deposit and bank accounts into joint tenancy
    with a right of survivorship). This paragraph gave the parties the right to make any
    transfer of their property they desired. 
    Id. at 543
     (“By transferring monies into joint
    tenancy with his wife, [decedent] exercised this right consistently with the
    provisions of the antenuptial agreement.”).
    These provisions are consistent with Barbara’s understanding of the
    premarital agreement—that anything acquired before the marriage would remain
    separate property (regardless of its commingling with other assets) and any assets
    acquired during the marriage would be shared equitably. The parties’ use of the
    joint accounts is also consistent with the premarital agreement as a whole. At oral
    10
    argument, Barbara contended that paragraph 15 was meant to allow the parties to
    make deposits from their premarital retirement accounts and investments into a
    joint account without converting those assets into marital property. That is exactly
    what the parties did during the marriage. Barbara testified that each year, she and
    Keith would withdraw a certain amount from their investment accounts and make
    a deposit into their joint accounts, which they would then use throughout the year.
    At Keith’s death, those investment accounts went to his daughters.2 Accepting
    Michelle and D’An’s interpretation of the premarital agreement would require us to
    find that all of the income the parties earned during their marriage remained their
    separate property. That is not what the agreement says or what the parties
    intended.
    Michelle and D’An failed to provide substantial extrinsic evidence to show
    Keith intended no right of survivorship with regard to the Wells Fargo accounts.
    Rather, the premarital agreement reflects Barbara’s understanding that the parties
    would share in the proceeds of their joint efforts during their marriage while keeping
    the assets accumulated before their marriage separate and preserved for their
    families. Nothing in the agreement “overrides” the right of survivorship in the joint
    bank accounts. See Peet v. Monger, 
    56 N.W.2d 589
    , 596 (Iowa 1953) (finding a
    joint tenancy deed with right of survivorship “could stand together” with a premarital
    2 In line with this understanding, Barbara testified at trial that she was not making
    any claim to the $35,000.00 that was in Keith’s Wells Fargo account before the
    marriage or to a $20,910.07 inheritance Keith received during the marriage, both
    of which were deposited into the joint accounts. Although the district court did not
    give effect to this agreement in its ruling, Michelle and D’An have not raised that
    as an issue on appeal.
    11
    agreement, which gave the wife the “right to lessen some of her rights under the
    contract and to keep other rights in full force”).
    Because the accounts are in joint tenancy with the right of survivorship, they
    pass to Barbara and are not part of the estate. We therefore affirm the ruling
    overruling and denying the objections to the inventory and final report.
    AFFIRMED.