IN THE MATTER OF THE ESTATE OF STEVEN CARTER, Deceased, PATRICIA CARTER, Claimant - Appellant, vs. GENE CARTER, Administrator of the ESTATE OF STEVEN CARTER, Deceased, Administrator - Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 8-925 / 08-0344
Filed December 17, 2008
IN THE MATTER OF THE ESTATE OF STEVEN CARTER,
Deceased,
PATRICIA CARTER,
Claimant-Appellant,
vs.
GENE CARTER, Administrator of the
ESTATE OF STEVEN CARTER, Deceased,
Administrator-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Robert E. Sosalla,
Judge.
Patricia Carter appeals from the district court ruling concluding she waived
her beneficiary interest in her deceased ex-husband’s retirement account and
determining the account was an asset of the decedent’s estate. AFFIRMED.
Robert F. Wilson of Wilson, Matias, Lahammer & O’Brien, Cedar Rapids,
for appellant.
Kenneth F. Dolezal of Dolezal Law Office, Cedar Rapids, for appellee.
Considered by Sackett, C.J., and Eisenhauer and Doyle, JJ.
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DOYLE, J.
This case involves a dispute between a decedent’s ex-wife and the
decedent’s estate over the proceeds of the decedent’s retirement account. The
district court found the ex-wife waived her beneficiary interest in the retirement
account and determined the account was an asset of the decedent’s estate. We
agree and therefore affirm.
I. Background Facts and Proceedings.
The facts of this case are undisputed. Patricia and Steven were married
in 1993. Steven has sons from an earlier marriage. Steven’s increasing problem
with alcohol led to Patricia and Steven’s divorce in December 2005.
They
entered into a “Stipulation of Settlement,” which had been drafted by Patricia’s
attorney. The stipulation was approved by the district court and made a part of
the decree of dissolution of marriage.
Steven owned an American Funds retirement account at the time of the
dissolution.
Although not specifically referenced in the stipulation or decree,
Steven was awarded the account under the stipulation provision that stated:
“each party shall keep as their own, free and clear of any claim of the other party,
all property in their individual name.” It is undisputed that at the time of Steven’s
death in October 2006 Patricia was still designated as the beneficiary to the
retirement account.
The estate filed a “Petition for Retrieving (Possession) of Property of
Deceased and Request for Injunctive Relief.” The petition requested a writ of
replevin for the return of decedent’s property in Patricia’s possession and for
injunctive relief to prevent Patricia from obtaining or disposing of certain property,
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including the American Funds retirement account. The district court entered an
order providing, among other things, that the estate’s administrator, Patricia, and
others were prohibited and enjoined from selling, encumbering, transferring
possessing, or cashing in the American Funds retirement account.
By
agreement of the parties, trial of both the replevin action and the two claims in
probate filed by Patricia and her daughter were consolidated for trial. After two
days of testimony, the court issued very detailed findings of fact and
comprehensive conclusions of law. In reference to the retirement account, the
court found:
[W]hile the replevin action did mention the existence of a certain
American Funds retirement account, the ownership of which is
apparently in dispute, no evidence was presented by either party
which would enable the Court to address the issue of ownership of
this account at this time. Both parties were advised that they would
need to file an additional action to determine the ownership interest
of the Estate and/or Patricia Carter in and to the American Funds
Retirement Account.
Patricia then filed an “Application for Orders” requesting the court to
decree that Patricia was the sole owner of the American Funds retirement
account. A telephonic hearing was subsequently held with the parties waiving a
record of the proceedings. In its “Ruling Re: Application for Orders,” the district
court made a detailed analysis of Iowa law and, in applying it to the facts,
concluded Patricia waived her beneficiary interest in the account when she
signed the stipulation of settlement. The court further concluded the account was
an asset of the estate, and consequently denied Patricia’s application and
ordered the account be surrendered to the administrator of the estate.
Patricia appeals.
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II. Discussion.
Patricia argues on appeal that the retirement account should be hers
because (1) the stipulation and the decree did not specifically address the
retirement account, (2) the language of the stipulation and decree was not
sufficiently broad to encompass Patricia’s expectancy interest in the account, and
(3) there was no evidence of any intent on Steven’s part that Patricia should no
longer be beneficiary of his retirement account. “We review the ruling in this
equity action de novo.” Schultz v. Schultz, 591 N.W.2d 212, 213 (Iowa 1999);
Iowa R. App. P. 4.
Iowa follows the majority rule that “divorce or dissolution per se does not
void the designation of a named spouse on a life insurance policy.” Sorensen v.
Nelson, 342 N.W.2d 477, 479 (Iowa 1984). Likewise, divorce or dissolution of
marriage does not per se void the designation of a named spouse on a
retirement account. Schultz, 591 N.W.2d at 215. The crux of this dispute is
whether the stipulation at hand is sufficiently comprehensive to relinquish
Patricia’s expectancy interest in the retirement account. We find that it is.
Whether the interest is a “mere expectancy” or a more substantial property
interest, it can be disposed of by the dissolution court if this is clearly shown to be
the intent of the parties. Sorensen, 342 N.W.2d at 480. Furthermore:
[A] dissolution court’s division of the parties’ property does not, by
itself, affect a beneficiary interest; some additional language
addressing this expectancy interest is required or the beneficiary
spouse must have waived this interest as part of a stipulation or
settlement.
Schultz, 591 N.W.2d at 214-15.
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To determine Patricia and Steven’s intent, we must focus on the relevant
language of the stipulation. The parties stipulated:
The Petitioner and Respondent agree that each party shall keep as
their own, free and clear of any claim of the other party, all property
in their individual name.
....
The terms of this Stipulation constitute a full and complete
settlement of all claims of any kind, of either party against the other
arising out of this action.
The question is what effect to give the language in the stipulation that attempts to
“constitute a full and complete settlement of all claims of any kind.” (Emphasis
added.) Our supreme court has analyzed the language of numerous similar
agreements. See Schultz, 591 N.W.2d at 215; Sorensen, 342 N.W.2d at 480-81.
None are identical to the stipulation in this case, but after a review of these
cases, we find the stipulation in this case evidences the same wide scope found
in the Sorensen stipulation.
We believe the comprehensive language of the stipulation in this case
evidences the parties’ intent to “wipe the slate clean.” Accordingly, the district
court was correct in concluding Patricia stipulated away her interest in Steven’s
retirement account.
III. Conclusion.
Because we conclude the district court correctly concluded that Patricia
waived her beneficiary interest in Steven’s retirement account and determined
the account was an asset of Steven’s estate, we affirm the judgment of the
district court.
AFFIRMED.
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