In re Estate of Myers
N/A (2012)
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Rule of Law:
Under Iowa Code § 633.238 as amended in 2009, a surviving spouse's elective share is strictly limited to the four categories of assets explicitly enumerated in the statute, which do not include non-probate pay-on-death (POD) assets.
Facts:
- Karen Myers was married to Howard Myers.
- During her life, Karen Myers owned a checking account, a certificate of deposit, and an annuity.
- Karen designated her daughters as the pay-on-death (POD) beneficiaries for all three of these assets.
- Karen Myers died on November 2, 2009.
- Karen's will bequeathed the bulk of her estate to her daughters and stepson, leaving only some household furnishings to her husband, Howard.
- Howard Myers, a former attorney, had a restitution judgment against him from a criminal conviction for theft.
- To satisfy the judgment, Howard assigned his interest in Karen's estate, including his right to an elective share, to several parties (the assignees).
Procedural Posture:
- After Karen Myers's death, her will was admitted to probate.
- Howard Myers filed a claim in the probate court for his elective share of Karen's estate.
- Howard assigned his right to the elective share to the assignees.
- The assignees filed an application asking the probate court to determine if Karen's POD assets should be included in the calculation of the elective share.
- The probate court (the court of first instance) ruled that the POD assets must be included in the elective share.
- Rex Picken, the executor of Karen's estate, appealed the probate court's ruling to the Supreme Court of Iowa.
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Issue:
Does a surviving spouse's elective share under Iowa Code § 633.238 include assets, such as bank accounts and annuities, that are designated as pay-on-death (POD) to beneficiaries other than the spouse?
Opinions:
Majority - Waterman, Justice.
No, a surviving spouse's elective share under Iowa Code § 633.238 does not include pay-on-death (POD) assets. The statute, as amended in 2009, expressly states that the elective share is 'limited to' the four categories of property enumerated, and POD assets are not listed. The court reasoned that the legislature's addition of the phrase 'limited to' was a clear indication of its intent to create an exhaustive list and to legislatively abrogate the court's prior, more expansive 'control' test from Sieh v. Sieh. The court referenced legislative history, which explicitly stated the amendment was intended to exclude 'non-probate or nontrust assets' from the elective share. POD accounts are non-probate assets that pass to beneficiaries by contract upon the decedent's death and are therefore not considered 'personal property of the decedent' at the time of death for the purposes of the elective share statute.
Analysis:
This decision establishes a bright-line rule for calculating a surviving spouse's elective share in Iowa, clarifying that the list of assets in Iowa Code § 633.238 is exhaustive. The ruling significantly curtails the reach of the elective share by excluding common non-probate assets like POD accounts, thereby providing a clear method for individuals to transfer assets outside of their probate estate and beyond the reach of a surviving spouse's claim. While this provides certainty in estate planning, it also creates a potential loophole that could be used to intentionally disinherit a spouse, shifting the policy debate on spousal protection back to the legislature.
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