Court Opinion

ID: 4470801
Source: CourtListenerOpinion
Date Created: 2020-01-09 17:04:32.013537+00
Date Added: 2024-06-11T13:25:20.403055
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 19-0054
                             Filed January 9, 2020

IN THE MATTER OF THE ESTATE OF ROBERT EARL SIEFKAS, Deceased.

MICHAEL SIEFKAS,
     Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Clarke County, John D. Lloyd, Judge.

      A beneficiary appeals the district court’s order in an estate proceeding.

AFFIRMED AS MODIFIED.

      Peter M. Sand, Des Moines, for appellant.

      Richard O. McConville of Coppola, McConville, Carroll, Hockenberg

& Flynn, P.C., West Des Moines, for appellee.

      Heard by Vaitheswaran, P.J., Mullins, J., and Potterfield, S.J.*

      *Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2020).
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MULLINS, Judge.

          Michael Siefkas appeals a district court order in a proceeding concerning

his father’s estate. Michael argues the district court erred in determining a jointly-

held account should be listed on the estate inventory and was subject to attorney

fees. He also argues the jointly-held account was not an estate asset.

I.        Background Facts and Proceedings

          Robert Siefkas passed away in September 2017. His spouse preceded him

in death. Robert left four sons, William, Steven,1 Robert J. (Jim), and Michael.

Robert left a duly executed will that was submitted to probate by attorney Richard

Murphy in October 2017. Robert’s estate included real property and various items

of personal property. Robert also had three bank accounts held jointly with his

sons. One checking account, ending 5094, was held jointly with Michael. Michael

said discussions with Robert indicated the 5094 account was a “business account”

linked to a home being rented by Jim. Another checking account, ending 1511,

was held jointly with Steven. Michael indicated the 1511 account was similarly

linked to the home being rented by Steven. A third checking account, ending 3324,

contained more than $190,000 and was held jointly with Steven and Michael.

Nearly six months after Robert’s death, Steven and Michael evenly split the

remainder of the 3324 account. In February 2018, the inventory form was filed

with the court, which included all three checking accounts as jointly-held interests

of the deceased.       Michael questioned the inclusion of account 3324 on the

inventory and complained Murphy did not answer his questions.

1    Steven passed away in July 2018. He is survived by two children.
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       Jim petitioned to have Michael replaced as the executor. Following a

hearing in August 2018, William was appointed to replace Michael as executor of

the estate. Michael then moved for approval of an executor’s fee and to correct

the inventory by removing account 3324. Following a hearing in November, the

district court found account 3324 was properly included on the inventory form and

included the account in analyzing a reasonable fee for Michael’s services as the

executor until he was removed. Michael filed a motion to reconsider, enlarge, or

amend pursuant to Iowa Rule of Civil Procedure 1.904(2), asking the court to,

among other things, clarify whether account 3324 was an estate asset. The motion

was denied. Michael appeals.

II.    Analysis

       Michael makes three arguments on appeal.          First, Michael argues the

district court erred in finding account 3324 should be included on the probate

inventory form. Second, Michael argues the district court erred in finding account

3324 was subject to attorney fees. Third, Michael argues account 3324 is not an

estate asset. Also, in Michael’s reply brief, he asks this court to disregard eighty-

five pages of a transcript from a hearing not on appeal. Those pages are not

relevant to the issues on appeal and we do not consider them.

       Because the estate asset issue is distinguishable from the inventory and

attorney fee issues, we begin with a discussion of estate assets. Michael argues

account 3324 should not be considered an estate asset. Although the court found

account 3324 should be listed on the inventory form, the court denied the 1.904(2)

motion and declined to rule on the question of whether the account was an estate

asset. Specific types of probate proceedings are statutorily deemed “law actions,”
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including “[a]ctions to set aside or contest wills . . . and for the establishment of

contested claims.” Iowa Code § 633.33 (2017). A challenge to the contents of a

decedent’s gross estate is not explicitly included in the statutory language. See id.

The estate argues the issue should be framed as a contested claim, rendering this

a law action pursuant to section 633.33. Michael has not appealed the district

court’s decision concerning his fee claim. His only claims on appeal relate to

matters of administration, which are in equity and reviewed de novo. In re Estate

of Cory, 184 N.W.2d 693, 696–97 (Iowa 1971).

       Probate assets are property items belonging to a decedent that are “subject

to administration by a personal representative.” Iowa Code § 633.3(31). However,

certain types of property transfer ownership outside of probate proceedings. See

Iowa Code § 633.5 (stating life insurance proceeds are not estate property unless

made payable to a decedent’s estate); In re Estate of Roehlke, 231 N.W.2d 26, 28

(Iowa 1975) (holding accounts held in joint tenancy between decedent and her

sisters were not estate assets).

       In distinguishing statutory language between Medicaid recovery statutes

and property law, our supreme court has examined the ownership of joint tenancy

property “at the time of [a decedent’s] death.” In re Tr. of Barkema, 690 N.W.2d
50, 56 (Iowa 2004). For the purposes of Medicaid statues, “at the time of death”

means “a point in time immediately before death.” Id. However, for the purposes

of property law, “joint tenancy property passes by operation of law to the other joint

tenant when one joint tenant dies.” Id. “Property held in joint tenancy is not

devisable by the will. It is not a part of the estate.” In re Estate of Kiel, 357 N.W.2d
628, 631 (Iowa 1984).
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      Our supreme court’s opinion in In re Estate of Roehlke is instructive. The

Roehlke court explained, “when a bank account in two names is expressly made

payable to either or to the survivor, a joint tenancy exists.” 231 N.W.2d at 28.

There is no special language required to create a joint tenancy. Id. A court must

examine the situation to determine “whether the person establishing the account

intentionally and intelligently created a condition embracing the elements of joint

ownership and survivorship.    The substance of the transaction controls.”      Id.

Factors to consider include the signature of a beneficiary depositor on account

documents; a beneficiary depositor’s knowledge of the account; possession of a

passbook; or allegations of fraud, duress, mistake, or confidential relationship.

See id.; In re Estate of Martin, 155 N.W.2d 401, 405–06 (Iowa 1968).

      Here, Michael testified that he and his brother Steven were the co-owners

of account 3324 with Robert. He also testified that, upon his father’s passing,

account 3324 passed to the possession of the survivors, Michael and Steven.

Michael also submitted a copy of the document creating account 3324. The

document lists the ownership of the account as “Joint (Right of Survivorship.)” The

document lists Robert, Steven, and Michael as “Authorized Individuals.” The

document is not signed, but absence of signatures may not be dispositive. See

Roehlke, 231 N.W.2d at 28; Martin, 155 N.W.2d at 405–06. There have been no

allegations of Michael or Steven engaging in fraud, duress, or a confidential

relationship with Robert in the creation or control of account 3324. Nor has there

been any argument the account was created as the result of a mistake.

      Based on the factors described above, it is clear the account was held in

joint tenancy and was not an estate asset. See Kiel, 357 N.W.2d at 631; Roehlke,
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231 N.W.2d at 28; Martin, 155 N.W.2d at 405–06. Because ownership of account

3324 passed automatically, by operation of law, at the time of Robert’s death, it

immediately became the property of Michael and Steven. See Barkema, 690

N.W.2d at 56.

       However, estate assets for tax and probate purposes are not identical. Iowa

Admin. Code r. 701-86.1.         “[P]roperty owned as joint tenants with right of

survivorship . . . [is] not part of the decedent’s probate estate, but [is] includable in

the decedent’s gross estate for inheritance tax purposes.”            Id.   Accordingly,

because a jointly-held account is considered a part of the gross estate for

inheritance tax purposes, it must be listed on the inventory form. See Iowa Code

§ 633.361(12). In this case, the court’s order denying the 1.904(2) motion was

correct.

       We now turn to Michael’s argument the account should not be includable in

determining the executor’s attorney fee.2 The district court did not squarely answer

that question, even after Michael’s Rule 1.904(2) motion. On our de novo review,

we choose to resolve the issue because it is likely to present itself again in the

ongoing estate proceeding.

       A reasonable attorney fee may be awarded to an attorney and to a personal

representative for services rendered for administration of an estate. Iowa Code

§§ 633.197–.198. The maximum fee for each is governed by the same schedule

used to calculate compensation paid to a personal representative. Id. §§ 633.197–

.198. The fees are calculated based on the total value of “the gross assets of the

2 The district court did not rule on attorney fees, but Michael raised the issue and
then preserved the failure to rule in his 1.904(2) motion.
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estate listed in the probate inventory.” See id. §§ 633.197, .198. Our supreme

court’s discussion in In re Estate of Martin, 710 N.W.2d 536, 540–41 (Iowa 2006),

controls in this case. “We are confident that it was the intent of the legislature in

enacting section 633.197 that the gross estate listed in the probate inventory for

Iowa inheritance-tax purposes include all property passing under the methods of

transfer set forth in section 450.3 . . . .” Martin, 710 N.W.2d at 541. The Martin

court found the same rule applied to an award of attorney fees. Id. Jointly-held

accounts are subject to inheritance taxes pursuant to section 450.3(5). The jointly-

held account should be included in the calculation of the maximum fees allowable

to both the executor and attorney for the estate, but we offer no opinion as to how

much should be allowed by the court as reasonable fees. We modify the district

court’s ruling accordingly.

III.   Conclusion

       We find account 3324 was not an estate asset, but it should have been

included on the inventory and is subject to attorney fees. We affirm the district

court order as modified.

       AFFIRMED AS MODIFIED.