Estate of: Swartz, A. Appeal of: Swartz, E. ( 2015 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IN RE: ESTATE OF ANNA SWARTZ, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
:
APPEAL OF: EDWARD SWARTZ, :
EXECUTOR :
: No. 2751 EDA 2014
Appeal from the Order Entered August 26, 2014
In the Court of Common Pleas of Montgomery County
Orphans’ Court Division No(s).: 2011-X4287
IN RE: ESTATE OF ANNA SWARTZ, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
:
APPEAL OF: PEARL MACKERCHAR :
: No. 2794 EDA 2014
Appeal from the Order Entered August 26, 2014
In the Court of Common Pleas of Montgomery County
Orphans’ Court Division No(s).: 2011-X4287
BEFORE: BOWES, MUNDY, and FITZGERALD,* JJ.
MEMORANDUM BY FITZGERALD, J.: FILED AUGUST 21, 2015
Appellant/Cross-Appellee (“Appellant”), Edward Swartz, Executor,
appeals from the order entered in the Montgomery County Court of Common
Pleas, denying his exceptions to the adjudication entered by the orphans’
court. Appellant contends the orphans’ court erred in finding the Schwab
*
Former Justice specially assigned to the Superior Court.
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tenancy in common account was not an estate asset. Appellee/Cross-
Appellant (“Appellee”), Pearl Mackerchar, appealed from the order entered in
the Montgomery County Court of Common Pleas denying her exceptions to
the adjudication. Appellee claims the orphans’ court erred by failing to find
that the Schwab joint tenants with right of survivorship (“JTWROS”) account
should not be included as an estate asset. We affirm.
We glean the facts from the orphans’ court opinion and the record.
“The decedent, Anna Swartz, died on November 16, 2011, leaving a Will
dated September 22, 1993, which was duly probated by the register of Wills
of Montgomery County on December 6, 2011, at which time the Register
granted Letters Testamentary to [Appellant], the Accountant herein
(“Accountant”).” Orphans’ Ct. Op., 7/21/14, at 1. Appellee is the
decedent’s daughter and Appellant’s sister. N.T. Pet. for Removal of
Executor, 11/13/12, at 4. The decedent had two other children, Maurice and
Jay, who is deceased. Id. at 6. Jay Swartz’ interests are represented by the
executor of his estate, Brandon Swartz. Orphans’ Ct. Op. at 2.
The First and Final Account was filed on December 26, 2012. Appellee
filed objections on January 31, 2013. Appellee filed supplemental objections
on July 26, 2013. A hearing on all of the objections was held on July 29,
2013. The orphans’ court entered an Adjudication on July 18, 2014.
Appellant and Appellee filed exceptions to the Adjudication on August 7,
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2014. On August 26, 2014, the orphans’ court denied Appellant’s and
Appellee’s exceptions. These timely appeals followed.1
Appellant raises the following issues for our review:
A. Did the orphans’ court err by finding a Schwab tenants-
in-common account[2] was improperly included as an
estate asset where the decedent had been the sole
contributor to the account and retained the right to
withdraw the funds during her lifetime?
1. Did the orphans’ court err by not finding that a
resulting trust was established in decedent’s favor in a
Schwab account where she had been the sole
contributor to the account and retained the right to
withdraw the funds during her lifetime?
2. Did the orphans’ court err by finding that Appellee
had been gifted a 1/5th share in a Schwab account by
the decedent even though Appellee was never aware of
the account and denied signing the account agreement?
B. Did the orphans’ court err by failing to recognize judicial
admissions by the Appellee that─proceeds from the sale of
decedent’s home should be place[d] in her estate and
Appellee was never aware of the account where the
proceeds had been placed, as these admissions precluded
her from claiming a 1/5th ownership in the proceeds?
Appellant’s Brief at 4.
1
The parties were not ordered to file Pa.R.A.P. 1925(b) statements of errors
complained of on appeal.
2
We note that at issue in the case sub judice are two Charles Schwab
accounts, viz., account number 8650-1118 (“Ex. 01”) and account number
1845-0661 (“Ex. O2”). N.T. Objection to Account, 7/19/13, at Ex. 01, 02.
Ex. 01 is held in the names of Decedent and Appellant as JTWROS. Ex. 02 is
held in the names of the decedent and her four children as tenants in
common.
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Appellee raises the same issues as Appellant in her statement of
questions involved suggesting the answer to each question is “no.”
Appellee’s Brief at 4. Appellee raises an additional issue: “Did the orphans’
court err by failing to find that the Schwab [JTWROS] should be included as
an estate asset?” Id. Appellant as Appellee on Cross-Appeal frames the
issue as follows:
A. Did the orphans’ court properly hold that the Schwab
account titled jointly to the decedent and [Appellant] was
properly excluded from the estate where no evidence was
offered to rebut the account’s registration or the MPAA’s [3]
presumption of a right of survivorship?
Appellant/Cross-Appellee’s Brief at 1.
First, we consider whether the orphans’ court erred in finding the
tenants in common account was improperly included as an estate asset.4
Appellant argues the orphans’ court erred by not including the tenants in
common account as an estate asset “because the decedent was the sole
contributor to the account and retained the right to withdraw the funds
during her lifetime,” citing Williams v. Funds of $1230, 116 A.2d 266 (Pa.
Super. 1955). Appellant’s Brief at 11. He avers this constitutes competent
3
Multiple Party Accounts Act, 20 Pa.C.S. § 6301, et seq. We note that
“Chapter 63 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S.A. §§
6301-6306 (Supp. 1993) (added by the Act of July 9, 1976, P.L. 547, No.
134, effective September 1, 1976) altered the law of this Commonwealth
applicable to joint interests in bank accounts.” Pagnotti v. Old Forge
Bank, 631 A.2d 1045, 1047 n.2 (Pa. Super. 1993).
4
The resolution of this issue is dispositive of the issues raised by Appellant.
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evidence to rebut the presumption that tenants in common hold equal
shares in the property. Id. at 11, 13. Appellant contends that he, “his
brother, Maurice Swartz, and nephew, Brandon Swartz, as representative for
deceased-brother, Jay Swartz, each acknowledged they were not equal
1/5th owners in the Schwab account.”5 Id. at 14. Therefore “it is locally
5
Appellant refers to a document denominated “A-3” in which the
aforementioned parties consented to the treatment of the tenants in
common account as part of the estate. N.T., 7/29/13, at 118. Ex. A-3
contains three identical letters signed by Appellant, Maurice Swartz, and
Brandon Swartz, stating as follows:
On 11-16-2001 my mother, Anna Swartz, passed away.
At the time of her demise she was listed as a Tenant in
Common on Schwab account # 1845-0661.
Please be advised that her ownership in this account is
96% and the remaining Tenants in Common have
ownership of 1% each.
The remaining owners are:
Pearl MacKerchar
Jay Swartz (Deceased)
Edward Swartz
Maurice Swartz
Enclosed is a copy of LETTERS TESTAMENTARY on the
Estate of Anna Swartz granted to Edward Swartz to
administer the same.
Enclosed is a copy of LETTERS TESTAMENTARY on the
Estate of Jay Swartz granted to Brandon Swartz to
administer the same.
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impossible for Appellee to have been the sole 1/5th owner of the account.”
Id.
Appellant claims the only reason the names of his siblings were placed
on the account was “to create ‘transparency’ for his dealings with [the
decedent’s] money, as he was acting as her power-of-attorney.” Id. at 14.
Appellant avers he “would know the purpose behind placing the names of his
siblings on the account since he is the one who did it.” Id. Appellant
contends the account was not owned in equal shares notwithstanding the
Account Agreement which states: “Tenants in Common If one owner dies,
his/her interest passes to his/her estate (50/50, unless otherwise noted)[.]”
Id. at 14-15, citing N.T., 7/29/13, Ex. 02 at 2. Appellant argues “[t]his
language is clearly meant only to explain the ordinary disposition of a
tenants in common account at the death of one accountholder─that is, each
accountholder is entitled to his percentage share in the account. Here,
Appellee and her three brothers had no percentage share of ownership in
the account.” Id. at 15 (dashes omitted).
Our review is governed by the following principles.
Our standard of review of an orphans’ court’s decision is
deferential. When reviewing a decree entered by the
Orphans’ Court, this Court must determine whether the
record is free from legal error and the court’s factual
Distribution of assets should be made in accordance with
the aforementioned ownership.
Ex. A-3.
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findings are supported by the evidence. Because the
Orphans’ Court sits as the fact-finder, it determines the
credibility of the witnesses and, on review, we will not
reverse its credibility determinations absent an abuse of
that discretion.
However, we are not constrained to give the same
deference to any resulting legal conclusions. Where
the rules of law on which the court relied are
palpably wrong or clearly inapplicable, we will
reverse the court’s decree.
An abuse of discretion is not merely an error of
judgment; if, in reaching a conclusion, the court
overrides or misapplies the law, or the judgment
exercised is shown by the record to be . . .
manifestly unreasonable or the product of partiality,
prejudice, bias or ill will, discretion has been abused.
In re Estate of Strahsmeier, 54 A.3d 359, 362-63 (Pa. Super. 2012)
(citations omitted).
Tenancy in common is distinguished from joint tenants with right of
survivorship.
When two or more persons hold property as JTWROS,
title to that property vests equally in those persons during
their lifetimes, with sole ownership passing to the survivor
at the death of the other joint tenant. In contrast, a
tenancy in common is an estate in which there is unity of
possession but separate and distinct titles.
In re Estate of Quick, 905 A.2d 471, 490 (Pa. 2006) (footnote and
citations omitted).
In Estate of Allen, 412 A.2d 833 (Pa. 1980), our Pennsylvania
Supreme Court held that a JTWROS was terminated where one party acted
in bad faith. Id. at 838. The Allen Court opined:
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We conclude that the record supports no finding other than
that James Allen Jr.’s withdrawal of the Fidelity account
funds was in bad faith and was “for the purpose of
depriving (testator) of any use thereof or title thereto.” As
such, his action terminated the joint tenancy, created a
tenancy in common, and one-half of such funds
should properly have been included in decedent’s
estate.
Id. (emphases added and citation omitted)
Instantly, as to the tenancy in common account, the orphans’ court
opined:
[Appellee] objects to the [Appellant’s] inclusion of the full
amount of a Charles Schwab account [,Ex. 02,]as an
estate asset. This account, ending in 0661 as created in
2001 and held among the decedent and her four children
as tenants in common. . . . [Ex. 02] is the Charles Schwab
form, executed by all of the decedent’s children . . . . This
document specifically states that this account is to be held
as tenants in common and explains that “[i]f one owner
dies, his/her interest passes to his/her estate (50/50,
unless otherwise noted).” Accordingly, as there are five
co-tenants to this account, each person holds a 1/5th
interest.
[Appellant] argues however, that there was an
agreement in November of 2011 among the siblings, which
supersedes the document admitted as [Ex. 02], to treat
this account as owned 96% by the decedent and 4% by
the siblings, with each sibling having a 1% interest. In
support of this claim, [Appellant] offered [Ex.] A-3 as
evidence of the agreement. This [c]ourt does not find
[Appellant’s] claim credible. [Ex.] A-3, as [Appellant]
acknowledged during his testimony, only includes his
signature, the signature of Maurice Swartz and the
signature of Brandon Swartz as executor of Jay Swartz’
estate. Notably absent is the signature of [Appellee] to
this Agreement. As such, this Agreement is unenforceable
as it is not executed by all the parties. . . . The account
lists the value of the Charles Schwab account as
$285,150.00. The decedent’s 1/5th interest in this
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account is $57,030.00. The balance of the Schwab
Account, in the amount of $228,120.00 was
improperly included as an asset of the Estate of Anna
Swartz, and should be distributed in equal shares among
the four children of Anna Swartz, $57,030.00 to each of
the children, including the Estate of Jay Swartz.
Orphans’ Ct. Op. at 2-3 (citations omitted). We agree no relief is due.
At the hearing, Appellant testified on cross examination, inter alia, as
follows regarding the agreement marked Ex. A-3.
Q: Now, December 2011, after your mother died, you
testified you had a family meeting and you presented to
the Court Exhibit A-3, I believe. You, your brother, and
your nephew signed off.
Do you recall that meeting?
A: Yes. Well, I had the meeting. The letters were sent
after. At the meeting, we just─I said that I want
consensus. Does everybody agree that we will follow the
Will and the assets of my mother, and everybody agreed,
including [Appellee].
* * *
Q: And isn’t it true that the three people you presented
here under A-3 who were consenting to the treatment of
this tenants in common account to be treated as part of
the estate, that all three of them either benefited
personally or their children benefited by agreeing to that.
A: You mean did they benefit any more?
Q: Correct.
A: No. It’s all the same.
Q: Well, is that true? By agreeing to deal with it as an
estate, does that mean the grandchildren were getting
$5,000 each?
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A: Or under the Will.
Q: Correct.
A: Okay. They benefited in that regard.
Q: So your children, Maurice’s children, Brandon got an
extra $5,000 because of that also.
A: That’s what my mother wanted. . . .
Q: Are you the one that chose to title the account as
tenant in common?
A: I did it because she was driving me nuts. Really, she
was driving me nuts.
N.T. at 118-19.
The orphans’ court did not find Appellant’s claim to be credible. We
will not reverse the credibility determination of the orphans’ court. See
Strahsmeier, 54 A.3d at 362-63. The orphans’ court properly concluded
that the balance of the tenancy in common account, excluding the
decedent’s 1/5th share, was not an estate asset. Cf. Allen, 412 A.2d at
838. We discern no abuse of discretion in the orphans’ court’s finding that
the tenancy in common account was improperly included as an estate asset.
See Strahsmeier, 54 A.3d at 362-63; Quick, 905 A.2d at 490.
Lastly, Appellee argues the JTWROS account should have been
included as an estate asset because the survivorship was not intended by
the decedent at the time the account was created. Appellee’s Brief at 12.
“The funds were solely the decedent’s.” Id. Appellee avers “[w]hen a new
widow adds a child on to an account it is invariably for convenience in a time
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of turmoil. The widow is not thinking of the ramifications of how an account
is titled. She is not going to do tenants in common since it is her money.
[JTWROS] is the only other option that a bank or broker offer.” Id. at 13.
Appellee argues she has presented clear and convincing evidence that
survivorship was not intended by the decent at the time the account was
created. Id. Thus, she avers the JTWROS account should have been
included as an estate asset. Id.
In Pagnotti, this Court opined:
Pursuant to the Pennsylvania Probate Estates and
Fiduciaries Code, a joint account is defined as follows:
“Joint Account” means an account payable on
request to one or more of two or more parties
whether or not mention is made of any right of
survivorship.
Section 6304 of Title 20 creates a presumption that a bank
account is a joint account with right of survivorship. The
presumption can be overcome only by a presentation of
clear and convincing evidence of a different intent.
Specifically, 20 Pa.C.S.A. § 6304[6] provides the following:
6
We note that the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. §§
6301-6306 was effective September 1, 1976. See In re Estate of Myers,
642 A.2d 525, 527 (Pa. Super. 1994) (common law governed property rights
for multiple party accounts prior to enactment of Chapter 63 of the Code).
Appellant’s reliance on Williams, is therefore unavailing. In Pagnotti,
the decedent and appellee owned a bank account.
Following the decedent’s death, appellant and appellee
each claimed a right to the money in the account.
Appellee claimed that the bank account, owned by
decedent and appellee, was a joint account with right of
survivorship. Appellee, therefore, asserted that the money
remaining in the account following the death of the other
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Any sum remaining on deposit at the death of a
party to a joint account belongs to the surviving
party or parties as against the estate of the decedent
unless there is clear and convincing evidence of a
different intent at the time the account is created.
Id. at 1047-48.
The Pennsylvania Supreme Court opined:
Indeed, the MPAA clearly evinces a legislative intent that
joint accounts are to be generally governed and
interpreted separate and apart from provisions governing
wills. Section 6306 of the MPAA provides: “No transfer
resulting from the application of section 6304
(relating to right of survivorship) shall be considered as
testamentary or subject to Chapter 21 (relating to
intestate succession) or Chapter 25 (relating to wills).” 20
Pa.C.S. § 6306. The comment to section 6306 provides:
This section is derived from Section 6–106 of the
Uniform Probate Code. The Commissioners’
comment to that section states, in part, that:
The purpose of classifying the transactions
contemplated by [this chapter] as nontestamentary
is to bolster the explicit statement that their validity
as effective modes of transfers at death is not be
determined by the requirements for wills. The
section is consistent with [existing law].
owner of the account would pass by operation of law to
appellee. Appellant argued that the bank account was
owned by appellee and decedent as a tenancy in common,
and, therefore, by operation of law, decedent’s estate was
entitled to half of the money remaining in the account
following decedent’s death.
Pagnotti, 631 A.2d at 1047. The Pagnotti Court opined that the “case can
be . . . distinguished from Williams in that we are bound by 20 Pa.C.S.[ ] §
6301 et seq. which was codified after the filing of Williams, supra.” Id.
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20 Pa.C.S. § 6306, Jt. St. Govt. Comm. Comment—1976. .
..
Further, Section 6304(d) provides: “Change by will
prohibited.—A right of survivorship arising from the
express terms of an account or under this section, or a
beneficiary designation in a trust account cannot be
changed by will.” 20 Pa.C.S. § 6304(d).
* * *
[T]he MPAA rather clearly evidences a legislative intent
that, except when the instrument explicitly provides to the
contrary or in the unusual case based on a heightened
degree of evidence, individuals and institutions may safely
rely upon the presumed right of survivorship of MPAA joint
accounts.
* * *
A joint tenancy with right of survivorship
having been created and not terminated at the
death of one tenant, the law is too well settled to be
gainsaid. The Orphans’ Court properly held that the
funds passed outside the estate to the party
having the right of survivorship.
Estate of Allen, 488 Pa. 415, 412 A.2d 833, 838 (1980)
(footnote omitted).
* * *
[J]oint accounts with rights of survivorship are typically
created as “convenience accounts” to allow caretakers
to assist senior citizens with the management of their
finances. “Like other testamentary devices, creation of a
joint account, without more, accomplishes no present
transfer of title to property. If . . . one person deposits
all sums in the joint account, this arrangement
contemplates transfer of title to those funds to the
other person or persons named on the account upon
the death of the depositor. . . .
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In re Novosielski, 992 A.2d 89, 101, 102, 105 (Pa. 2010) (some citations
and emphasis omitted and some emphasis added).
This Court in In re Estate of Cella, 12 A.3d 374 (Pa. Super. 2010)
opined:
Recently, the Supreme Court clarified certain concepts
concerning the nature of joint accounts and the statutory
presumption of survivorship generally, as well as the
necessary quantum of proof to overcome that presumption
and what effect if any the creation of a will has on that
presumption. In re Novosielski, supra. First, the Court
reiterated that joint accounts with rights of survivorship
are typically created as “convenience” accounts; as such, a
legitimately created joint account carries the statutory
presumption of survivorship unless negated by the form of
the account. The purpose of the presumption is to provide
financial institutions with “the certainty and regularity
required for the general course of human commerce” and
to avoid “the protracted resolution of family disputes,” as
illustrated by the present conflict. Thus, the opponent of
the survivorship right has the burden to produce
evidence “so clear, direct, weighty, and convincing
that the fact finder could without hesitation, come to a
clear conviction that Decedent, in fact, had not intended” a
right of survivorship regardless of how the accounts were
created. The proponent of the survivorship right, on
the other hand, is not required to come forward with
additional evidence of the decedent’s intent at the
time the account was created.
Id. at 380 (some citations omitted and emphases added).
Instantly, regarding the JTWROS account, the orphans’ court opined:
[T]his account was opened on February 11, 1992 with the
registration of joint tenants with rights of survivorship.
The Account was titled in the names of the decedent and
[Appellant/Cross-Appellee]. . . . In January 2012, when
the funds were withdrawn from that account by
[Appellant/Cross-Appellee], the funds totaled
approximately $90,000.
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Under the MPAA, as the account was in joint names,
[Appellant/Cross-Appellee] as the named survivor is
entitled to the proceeds by right of survivorship.
[Appellee/Cross-Appellant] did not introduce any evidence
to overcome the presumption to which [Appellant/Cross-
Appellee] is entitled under the Act. [Appellee/Cross-
Appellant] simply failed to provide the [c]ourt any
evidence to support her claim that the account should not
be treated as a joint account.
Orphans’ Ct. Op. at 7-8. We agree no relief is due.
Appellee/Cross-Appellant’s contention that the JTWROS account was
created for convenience is unavailing. See Estate of Cella, 12 A.3d at 380.
Appellee/Cross-Appellant’s averment that “the funds were solely the
decedents” is meritless. See Novosielski, 992 A.2d at 105.
Appellee/Cross-Appellant has not presented any clear and convincing
evidence that the decedent did not intend to create a JTWROS account. See
Pagnotti, 631 A.2d at 1047-48. Thus, title to the funds in the account
transferred to Appellant/Cross-Appellee, the survivor, at the death of the
joint tenant. See Novosielski, 992 A.2d at 105. Appellee/Cross-
Appellant’s argument that the account should have been considered an
estate asset is meritless. See id. at 102. We discern no abuse of discretion
or error of law by the orphans’ court.7 See Estate of Strahsmeier, 54
A.3d at 362-63.
Order affirmed.
7
We agree with the orphans’ court’s observation that no party has asked for
an accounting of Appellant as agent. See Orphans’ Ct. Op. at 8 n.3.
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Judge Mundy joins the memorandum.
Judge Bowes concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/21/2015
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