Estate of Button, Matter of

• Decision Date: 24 April 1992
• Docket Number: No. 66612,66612
• Citation: 830 P.2d 1216,17 Kan.App.2d 11
• Parties: In the Matter of the ESTATE OF Aileen BUTTON, Deceased.
• Court: Kansas Court of Appeals

Page 1216

830 P.2d 1216

17 Kan.App.2d 11

In the Matter of the ESTATE OF Aileen BUTTON, Deceased.

No. 66612.

Court of Appeals of Kansas.

April 24, 1992.

Review Denied July 9, 1992.

Syllabus by the Court

1. To establish a valid inter vivos gift, there must be (a) an intention to make a gift; (b) a delivery by the donor to the donee; and (c) an acceptance by the donee.

2. The burden of proving that a gift was made, including the existence of all the elements necessary to its validity, is upon the party asserting the gift.

3. A party attempting to establish a valid inter vivos gift, who fails in his or her burden of proving a transfer was a gift, is precluded from arguing that the transfer was entitled to be treated as an advancement from the donor's estate.

4. The proceeds of joint tenancy property, in the absence of a contrary agreement, retain the character of the property from which they are acquired.

5. Under the facts in this case, the trial court properly held that monies from parents' accounts held in joint tenancy with rights of survivorship and transferred to a son as loans retained their status as joint tenancy property to be set off against the distributive share of the son to his portion of the surviving joint tenant's probate estate.

John Black, of Black & Black, Salina, for appellant.

Dana P. Ryan, of Clark, Mize & Linville, Chartered, Salina, for appellee.

Before LARSON, P.J., GERNON, J., and RICHARD B. WALKER, District Judge, assigned.

LARSON, Presiding Judge.

David Button appeals from the trial court's determination that monies transferred to him by his now-deceased parents were loans owned by his parents as joint tenants with the right of survivorship which are to be set off against his distributive share of the estate of his mother, Aileen Button.

David, Damon, and Darcy Button are the only children of Robert and Aileen Button.

Over a period of several years, Robert transferred money from his and Aileen's joint tenancy with right of survivorship bank accounts to all three sons. Damon and Darcy understood the monies received were loans, which they repaid with interest.

David did not characterize the monies received as loans or gifts, nor did he make any repayment to his parents with the exception of one cash payment of $1,600.

Robert died intestate in December 1988. After Robert died, Damon and Darcy discovered that David had not repaid their parents for the monies transferred to him. An attempt was made to work out an agreement with David to repay the monies to Aileen.

Aileen had multiple sclerosis. From 1978 until her death she did not handle personal or financial matters. Aileen did execute a will that left all of her property to her three sons in equal shares.

After Aileen died in October 1989, Darcy was appointed executor of her estate.

The final settlement petition requested the loan obligations of David plus accrued interest be set off against his distributive share of Aileen's estate. David objected to the final settlement petition, denying he was obligated to Aileen or her estate.

All three sons testified at the hearing. Documentary evidence showing the transfers as loans and Robert's accountings was introduced.

Testimony showed all advanced monies came from accounts held as joint tenancy with rights of survivorship and the one payment made by David was returned to such an account. The evidence showed Robert and Aileen were devout Mormons who felt all of their property was owned jointly.

The trial court found the monies transferred to David from his deceased parents were loans held as property in joint tenancy with rights of survivorship to be set off against his distributive share of Aileen's estate.

David appealed.

Did the trial court err in finding the monies transferred to David were loans rather than gifts?

The determination of whether the monies transferred to David were gifts is a question of fact. See Hudson, Administrator v. Tucker, 188 Kan. 202, 211, 361 P.2d 878 (1961). "The standard of appellate review of findings of fact has been stated numerous times by this court. The court must determine if the findings are supported by substantial competent evidence and whether they are sufficient to support the trial court's conclusions of law." Army Nat'l Bank v. Equity Developers, Inc., 245 Kan. 3, 19, 774 P.2d 919 (1989).

"To establish a valid gift inter vivos, there must be (a ) an intention to make a gift; (b ) a delivery by the donor to the donee; and (c ) an acceptance by the donee." In re Estate of Matthews, 208 Kan. 492, Syl. p 6, 493 P.2d 555 (1972). "The burden of proving that a gift was made, including the existence of all the elements necessary to its validity, is upon the party asserting the gift." Truax v. Southwestern College, 214 Kan. 873, Syl. p 3, 522 P.2d 412 (1974).

According to Coe, Administratrix v. First National Bank & Trust Co., 219 Kan. 352, Syl. p 1, 548 P.2d 486 (1976), "[a] loan is made when the borrower receives money over which he exercises dominion and which he expressly or impliedly promises to repay."

"If the judicial mind is left in doubt or uncertainty as to exactly what the status of the transaction was, the donee must be deemed to have failed in the discharge of his burden and the claim of gift must be rejected." 38 Am.Jur.2d, Gifts § 106.

David did not characterize the monies as either loans or gifts, but merely as transfers from his mother and father.

Darcy introduced their deceased father's records, which specifically accounted for four of the transfers as loans. Three of the transfers have provisions that set forth a rate of interest. Interest was calculated and added to the loan principal in Robert's computations.

Robert's records showed other transfers of money to David for house payments and expenses of David's business from the joint tenancy account. Robert kept monthly accountings of transfers to David in the same manner as he kept accountings for loans to Damon and Darcy. Although only four of the largest transfers were characterized as loans, Robert's records support Darcy and Damon's contention that all transfers to David were intended as loans.

David clearly failed to meet his burden to prove the monies transferred to him were gifts. The trial court's findings that the monies transferred were loans is supported by substantial competent evidence. The lack of written promissory notes does not negate the existence of a loan transaction. In Rains v. Weiler, 101 Kan. 294, 297, 166 Pac. 235 (1917), it was stated:

" 'The intention of the parties to any particular transaction may, however, be gathered from their acts and deeds, in connection with the surrounding circumstances, as well as from their words; and the law therefore implies, from the silent language of men's conduct and actions, contracts and promises as forcible and binding as those that are made by express words or through the medium of written memorials.' "

Neither can the monies transferred be considered as advancements, as David argues.

" 'In its strict technical sense, an advancement is a perfect and irrevocable gift, not required by law, made by a parent, during his lifetime, to his child, with the intention on the part of the donor that such gift shall represent a part of the whole of the portion of the donor's estate that the donee would be entitled to on the death of the donor, intestate.' " In re Estate of Bush, 155 Kan. 556, 560, 127 P.2d 455 (1942).

Strictly speaking, the term advancement applies in situations when the decedent died intestate, but the term has been used in will cases interchangeably with ademption. In re Estate of Wernet, 226 Kan. 97, 107, 596 P.2d 137 (1979); Bush, 155 Kan. at 560, 127 P.2d 455. See K.S.A. 59-510.

Before the transfers to David could be considered advancements, they first would have to have been shown to be gifts. David, having failed in his burden to prove the transfers were gifts, is precluded from arguing that the transfers were entitled to be treated as advancements.

The trial court correctly ruled the monies transferred to David from his parents were loans.

Did the trial court err in finding the loans were owned by Robert and Aileen as joint tenants with the right of survivorship?

David most strongly argues that the loans cannot be joint tenancy assets because there is no written evidence he promised to pay the debt to his parents as joint tenants with the rights of survivorship.

Damon and Darcy claim there is no legal authority to support David's contention that a third-party debtor can determine the existence or nonexistence of a joint tenancy between the makers of a loan. They further argue the loans to David made from joint tenancy funds retained the character of joint tenancy property, relying on In re Estate of Biege, 183 Kan. 352, 327 P.2d 872 (1958).

David contends Biege is distinguishable from the present situation.

It is recognized that joint tenancy ownership may apply to personal as well as real property. In re Estate of Girndt, 225 Kan. 352, Syl. p 1, 590 P.2d 1038 (1979); Winsor v. Powell, 209 Kan. 292, 299, 497 P.2d 292 (1972).

Under common law, four unities had to be present to create a joint tenancy: interest title, time, and possession. Simonich, Executrix v. Wilt, 197 Kan. 417, 421, 417 P.2d 139 (1966).

The loans to David originated primarily from three bank accounts. The record on appeal...