In re Estate of Adams

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-120


In re Estate of Bertha Mae Adams             Supreme Court

                                             On Appeal from
                                             Rutland Superior Court

                                             November Term, 1989

Hilton H. Dier, Jr., J.

Deborah S. McCoy of Keyser, Crowley, Banse & Facey, Rutland, for appellant

John F. Evers, Susan M. Murray and R. Brandon Johnson, Law Clerk (On the
   Brief) of Langrock Sperry Parker & Wool, Middlebury, for appellee

R. Clarke Smith of Ryan Smith & Carbine, Ltd., Rutland, for executor-
   appellee


PRESENT:  Peck, Dooley and Morse, JJ., Barney, C.J. (Ret.), and Springer,
          D.J., (Ret.), Specially Assigned



     PECK, J.  Appellant Caryl T. Adams, a residuary legatee of the estate
of decedent, Bertha Mae Adams, appeals from a superior court judgment order
disposing of certain assets of the estate and granting the executor a fee
greater than the statutory amount.  We affirm.
     Appellant argues that three bank accounts should have been included in
the estate because there was no clear and convincing evidence that the
accounts were joint accounts with rights of survivorship, otherwise known as
absolute joint accounts.  He also argues that a fourth account should have
been included in the estate because it did not constitute a valid trust.
Finally, appellant challenges the trial court's conclusion that the estate
was one of unusual difficulty and responsibility which entitled the
executor to fees in excess of the statutory amount.
     Bertha Mae Adams died in August of 1982.  Passbooks and certificates
of deposit were found among her possessions.  Albert Wilson, the executor of
the estate, initially included all of the bank accounts in an inventory
taken in November of 1982.  In February of 1985, the executor moved to amend
the inventory to exclude the accounts from the estate because they were
jointly owned by the decedent and one or the other of her two children,
Caryl Adams and Evelyn Lindquist.  The probate court granted the executor's
motion, and Caryl Adams appealed to the Rutland Superior Court.
     At the time of her death, decedent's name was on seven bank accounts:
five savings accounts and two certificates of deposit.  The superior court
permitted the removal of all but one of the accounts from the probate
estate.  The court also affirmed the probate court's determination that the
estate was one of unusual difficulty and responsibility, and that the
executor accordingly was entitled to more than the statutory per diem fee.
The matter was returned to the probate court which issued a final
disposition in accordance with the superior court's opinion.  This appeal
followed.
                                    I.
     Appellant contends that the superior court erred in affirming the
probate court's decision to exclude from the estate three joint accounts.
We disagree.
     8 V.S.A. { 908 states, in part, that
            [w]hen a deposit has been made in a bank in the names
          of two or more persons, payable to any one of them, or
          payable to the survivors or any one of the survivors,
          such deposit or any part thereof, or any interest or
          dividend thereon may be paid to any one of such persons,
          whether the others are living or not . . . .

8 V.S.A. {909 states, in part, that
          the words "payable to either or to the survivor" or
          words of like effect in the order creating such account
          and signed by the person or persons who furnish the
          funds for such deposit shall be conclusive evidence, as
          between the payees and their legal representatives, of
          the creation of an absolute joint account.

     The superior court found that the three accounts in issue "all contain
in the deposit book clear indication that the account was established as a
joint deposit as defined in Title 8 V.S.A. { 908 and { 909 . . . ."  This
conclusion cannot be sustained under the Section 909 method of proving the
existence of an absolute joint account.  Mrs. Lindquist was not able to
produce for the three accounts an order creating the account, signed by
decedent and bearing the recital of the words "payable to either or to the
survivor" or words to the like effect.  Also, Mrs. Lindquist did not
introduce evidence showing that such an order must have existed but was
lost.
     Under prior law, since Section 909 does not apply, the court's
conclusion could only be sustained if Mrs. Lindquist established the
elements of valid inter vivos gifts with respect to the accounts.  See
Tucker v. Colburn, 140 Vt. 186, 189, 436 A.2d 1095, 1097 (1981); Tucker v.
Merchants Bank, 135 Vt. 597, 600, 382 A.2d 212, 214 (1977).  She would have
had to show "a manifest intention to create a present interest in [her]
during the joint lives of [decedent and her]" and "an unconditional delivery
or divestiture of the [accounts] transferred."  Colburn at 189, 436 A.2d  at
1097.  There is no evidence that decedent delivered the accounts or divested
herself of them.
     However, we agree with the Supreme Court of Montana that "[s]tringent
application of gift theory elements . . . ignores the reality of modern
practice relating to joint and survivorship bank accounts."  Malek v.
Patten, 208 Mont. 237, ___, 678 P.2d 201, 205 (1984).  While recognizing
that it is a minority view, we are inclined to agree that if a party cannot
rely on the statutory method for proving the existence of an absolute joint
account, it may prove that an absolute joint account exists by establishing
that the account was intended to be an absolute joint account by the
creator.  See Wigand v. State Department of Health and Welfare, 454 S.W.2d 951, 955 (Mo. App. 1970); Sawyer v. Lancaster, 719 S.W.2d 346, 349 (Tex.
Ct. App. 1986) (although the language "payable to the survivor" did not meet
the statutory requirements for the establishment of a joint account with
right of survivorship, it raised a rebuttable presumption of intent to
create a joint account with right of survivorship.)  "'[O]ur goal should be
to effectuate the intent of the party or parties creating [joint]
accounts.'"  Corrigan v. Coughlin, 11 Ohio App. 3d 176, ___, 463 N.E.2d 1258, 1260 (1983) (quoting In re Estate of Thompson, 66 Ohio St. 2d 433,
437, 423 N.E.2d 90, 94 (1981)).  Accordingly, we hold that even if an
account fails to satisfy the requirements of 8 V.S.A. { 909, the court may
still conclude that an account is an absolute joint account if it finds by
clear and convincing evidence that the creator of the account intended to
establish a joint account with right of survivorship. (FN1)
     The superior court in the instant case did not specifically find that
decedent intended to create absolute joint accounts, nor was it aware of
the correct standard of proof.  The court did, however, make the ultimate
finding that the disputed accounts all contained "in the deposit book clear
indication that the account was established as a joint deposit as defined in
Title 8 V.S.A. { 908 and { 909."  (emphasis added).  Although it is the
better practice to report all the facts upon which an ultimate finding is
based, "we have held on numerous occasions that if the record supports the
ultimate finding, we will affirm."  In re Proceedings Concerning a Neglected
Child, 129 Vt. 234, 237, 276 A.2d 14, 16 (1971) (citing Cass-Warner v.
Brickman, 126 Vt. 329, 333, 229 A.2d 309, 312 (1967)); In re Lake Seymour,
117 Vt. 367, 373, 91 A.2d 813, 817 (1952).
     The superior court found that the accounts were established as absolute
joint accounts.  It is generally presumed that one intends the natural
consequences of one's acts. Bristol-Myers Co. v. Picker, 302 N.Y. 61, 71, 96 N.E.2d 177, 182 (1950).  Since decedent established the accounts as absolute
joint accounts, presumably she intended to so establish them.  The record
supports this inference.  The parties stipulated that the disputed accounts
were all recorded in the respective banks as joint accounts for decedent and
Mrs. Lindquist and the passbooks of all the accounts included some version
of the language "payable to either or the survivor of either."  It is
uncontested that the passbooks were all found in decedent's possession and
no allegation was made that decedent was unaware of the right of
survivorship language in the passbooks.  The creation by the bank of a
          joint account at the order of the deceased, and the
          acceptance by her of the book of deposit reciting that
          it was issued to her and to [a second person] 'Payable
          to either or the survivor' [were] tantamount to an
          agreement by the deceased that the account in question
          should be held upon those terms.

Sullivan v. Hudgins, 303 Mass. 442, 444-45, 22 N.E.2d 43, 44-45 (1939).
Thus, decedent's acceptance of deposit books bearing survivorship language
is evidence of her intent that the accounts be absolute joint accounts. (FN2)
       Moreover, in the circumstances of this case, we do not believe there
was any error because the trial court was unaware of the correct standard of
proof.  Our review of the record indicates that the court's findings are
supported by clear and convincing evidence.  More important, the court
stated that it found "clear" indication of the establishment of a joint
account.  In In re C.W., 148 Vt. 282, 284-85, 532 A.2d 566, 568-69 (1987),
we took use of the word "clear" in the court's finding to mean that it
found clear and convincing evidence for its conclusion.  We believe the
court's findings so indicate in this case.
                                    II.
     Appellant also argues that the court improperly excluded from the
estate one account at the Troy Savings Bank held by decedent in trust for
Mrs. Lindquist.  He alleges that Mrs. Lindquist failed to prove a clear and
unequivocal intention by the depositor to create a trust.  We hold that the
court was correct in excluding the account because it constituted of a valid
Totten trust.
     8 V.S.A. { 907 states, in part, that
            [w]hen a deposit is made in a bank by one or more
          persons in trust for another, the name and residence of
          the person for whom the deposit is made shall be
          disclosed, and the deposit shall be credited to the
          depositor or depositors as trustee for such person.
          When other notice of the existence and terms of a legal
          trust is not given in writing to the corporation, at the
          death of the trustee, or if there is more than one
          trustee, at the death of the surviving trustee, the
          deposit or any part thereof, with the interest thereon,
          may be paid to the person for whom the deposit was made,
          or to his estate.

In In re Totten, 179 N.Y. 112, 125-26, 71 N.E. 748, 752 (1904), the Court
of Appeals of New York laid out the following rule:
          A deposit by one person of his own money in his own name
          as trustee for another, standing alone, does not estab-
          lish an irrevocable trust during the lifetime of the
          depositor.  It is a tentative trust merely, revocable at
          will, until the depositor dies . . . .  In case the
          depositor dies before the beneficiary without revo-
          cation, or some decisive act or declaration of dis-
          affirmance, the presumption arises that an absolute
          trust was created as to the balance on hand at the death
          of the depositor.

     Although, in essence, 8 V.S.A. { 907 encourages banks to treat accounts
held in trust as Totten trusts unless they are informed otherwise, Vermont
has not yet recognized Totten trusts.  See Methodist Church v. First
National Bank, 125 Vt. 124, 130, 211 A.2d 168, 172 (1965) (former 8 V.S.A. {
808, the precursor of 8 V.S.A. { 907, interpreted as merely a provision for
the protection of banks and did not change or affect the title of deposits).
However, although Section 907 technically only protects banks, given its
existence, it is more consistent to recognize the presumption laid out in
Totten.  Accord Seymour v. Seymour, 85 So. 2d 726, 727 (Fla. 1956) (Totten
trust doctrine accepted by court "without hesitation" because such trusts
have been accepted in many jurisdictions and because a statute similar to
Section 907 existed);  First Federal Savings & Loan Association of
Evansville v. Baugh, 160 Ind. App. 102, 107, 310 N.E.2d 101, 104 (1974)
(existence of a statute similar to Section 907 given as a reason for
expressly recognizing Totten trusts);  In re Jeruzal's Estate, 269 Minn.
183, 187, 130 N.W.2d 473, 476 (1964) (statute similar to Section 907 was
interpreted as providing for the establishment of Totten trusts).
Moreover, the Totten presumption has been accepted in numerous
jurisdictions.  Thus, we now adopt the Totten trust doctrine.
     In the instant case decedent deposited her own money in her own name as
trustee for Mrs. Lindquist.  Decedent died without revoking or disaffirming
the trust.  Thus, the disputed account falls neatly into the Totten trust
category and Mrs. Lindquist, the beneficiary, is entitled to the balance in
the account.
                                   III.
     Lastly, we agree with the superior court's conclusion that the estate
was one of unusual difficulty and responsibility.  The adversarial
relationship of the parties, the litigious atmosphere surrounding the
settlement of the estate, the nature of the property at issue, and changes
in the rules of probate procedure all support the trial court's decision
that the executor was entitled to higher compensation than that mandated by
statute.  We find no error.
     Affirmed.


                                        FOR THE COURT:



                                        _________________________________
                                        Associate Justice



FN1.      We overrule Tucker v. Merchants Bank, 135 Vt 597, 382 A.2d 212
(1977) and Tucker v. Colburn, 140 Vt 186, 436 A.2d 1095 (1981) to the extent
those cases hold that the existence of an absolute joint account may be
proven only by satisfying either 8 V.S.A. { 909 or the common law
requirements of an inter vivos gift.

FN2.      Appellant argues that the court improperly placed on him the
burden of proving that the accounts should have been included in the estate
because it stated that it found "that there has been no evidence that would
support inclusion of these accounts in the inventory of the Estate."  How-
ever, before making the statement the court had affirmatively found clear
evidence that the accounts were established as absolute joint accounts.