Court Opinion

ID: 9711739
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:38:09.06461+00
Date Added: 2024-06-11T18:23:07.220084
License: Public Domain

Morris, Ch. J.
(On petition for rehearing.) In a courteous and carefully prepared petition for rehearing the respondents question our determination that Series E and G Bonds payable to co-owners may be made the subject of a gift inter vivos between the co-owners and it is argued that such a determination is contrary to federal regulations, particularly Section 315.17 of the 1941 Supplement to the Code of Federal Regulations, which provides:
“The ownership of a savings bond or interest therein may be transferred or established through valid judical proceedings: Provided, however, That no such proceedings will be recognized if they ’would give effect to an attempted voluntary transfer inter vivos of the bond or would defeat or impair the rights of survivorship conferred by the regulations in this part upon co-owners and beneficiaries.”
As we read this and other federal regulations, when a bond of the co-owner type is issued, each co-owner becomes vested with a present interest in the bond, and the bond itself and the regulations confer the right of survivorship upon the co-owner. There is nothing in these regulations to prohibit the transfer from one co-owner to the other of his interest in the bond. It is true, of course, that such a transfer cannot in aiiy way impair the right of the United States to discharge its obligation under the bond in the manner provided by the bond and regulations: By making payment to the survivor, but the preservation of that right in the government does not result *560in the abrogation of the right of one co-owner to transfer to the other co-owner, by gift inter vivos or otherwise, his interest in jointly owned property and the transfer of such an interest by one co-owner to another is not a violation of the regulatory provisions prohibiting transfer of United States Savings Bonds.
' This question, in a case coming to our attention since the filing of our former opinion, has been considered by the Supreme Court of Nebraska, In re Hendricksen’s Estate, 156 Neb 463, 56 NW2d 711, in which it is said:
“The primary purpose of the Treasury Department regulations is to prevent the government from being involved in suits between claimants to government bonds. Thesé Treasury Department regulations refer to the bonds themselves, providing protectiou to the government if its agents pay the named owner or co-owner. ... It seems clear that the federal laws and regulations are not intended to interfere with the positive act of two co-owners of bonds by which one conveys her interest in them to the other.”
We also find that the Supreme Court of Montana in a case more recent than those cited in our opinion has said:
“If the person who advanced the consideration for the purchase of the bonds relinquishes dominion and control over them, they are treated as a gift and taxed as a transfer in contemplation of death. After the expiration of the presumptive period and in the absence of proof to the contrary, the gift is an absolute inter vivor gift and not taxable. If there is no delivery of the bonds'by the purchaser to the cotenant whose name appears thereon, the transfer is one to take effect at or after death, and taxable as such.” In re Marsh’s Estate, 125 Mont 239, 234 Pac2d 459.
Our decision is in accord with these cases and is neither contrary to nor does it interfere with the regulations of the Treasury Department pertaining to the purchase, transfer, and payment of Series E and G- Bonds. We adhere-to our opinion as written.
Crimson, . Christianson, Sathre and Burke, JJ., concur.