In re Estate of Cordero
| Decision Date | 31 May 2005 |
| Docket Number | No. 53756-3-I.,53756-3-I. |
| Citation | 127 Wash. App. 783,113 P.3d 16 |
| Parties | In re the ESTATE OF Delfino CORDERO. Jane Dahle, Appellant, v. Brenda Nadolski, Respondent. |
| Court | Washington Court of Appeals |
Warren M L Chinn, Attorney at Law, Kenneth Hsi Kung Chang, Law Offices of Kenneth H. Chang, Seattle, WA, for Respondent. Carl Palmer, Attorney at Law, Seattle, WA, for Appellant.
¶ 1 Subject to community property laws, RCW 11.11.020(1) permits the owner of any nonprobate asset specifically referred to in the owner's will to pass the asset to the testamentary beneficiary named in the will, notwithstanding the rights of any beneficiary of the asset named before the date of the will. And RCW 11.11.020(4) permits the owner of such asset to override the will by renaming the original beneficiary or by naming an entirely new beneficiary of the nonprobate asset, by making a written designation executed after the date of the will. To decide this appeal, we must assess the adequacy of a "switch rationale" that the decedent Delfino Cordero signed after he executed a will leaving all his nonprobate assets to his estate, to reinstate his earlier designation of his grandniece as his joint tenant with right of survivorship, with respect to a particular investment account.
¶ 2 Because the statute does not specify the form that the later beneficiary redesignation must take, and because we agree with the trial court that the signed switch rationale in this case was adequate to serve the statutory redesignation requirement as a matter of law, we affirm the trial court's ruling awarding the investment account to the grandniece.
¶ 3 In 1997, the decedent Delfino Cordero executed a will, which eventually was presented for probate by his grandniece Brenda Nadolski. On February 3, 1997, Cordero opened an investment account at Murphy Favre naming Nadolski as his joint tenant with right of survivorship. In 1998, Cordero executed a new will naming his niece Jane Dahle as personal representative. That will had a clause indicating that any investment accounts should pass to Cordero's estate, even if the accounts were held jointly with others at the time of his death.1
¶ 4 By September of 2000 when Cordero and Nadolski met with their investment banker, Dan Mingo, to discuss the investment, WM Financial Services had bought out Murphy Favre, and had given the investment account a new number, 86260144. Cordero and Nadolski discussed with Mingo various investment options to earn a higher yield, and ultimately decided to switch from Franklin Floating Rate trust investment to the Washington Mutual Flexible Income Portfolio, which they said they intended to hold for a period of at least 5 years. Mingo subsequently explained in an affidavit that it was his practice and the bank's procedure to ensure that clients understood that any changes to investment portfolios do not affect survivorship designations on joint accounts. And because such investment decisions had long-term implications, he would ask both parties if the survivor intended to hang on to the investment if the joint tenant were to pass on during the life of the investment.
¶ 5 According to Mingo, both Cordero and Nadolski stated that they understood that the beneficiary designation would not change on account of the switch of the investment; Cordero said that he understood that Nadolski would receive the funds in the joint account at his death; and Nadolski said that she intended to keep the Flexible Income Portfolio if Cordero should pass on during the life of the investment.
¶ 6 In the presence of Cordero and Nadolski, Mingo then prepared a "switch rationale" which he carefully explained to them. After Mr. Cordero acknowledged that he understood the switch rationale, Mingo had him sign the document. The switch rationale describes the relative risks of the old and new investments, expresses the intent to retain the new investment for a minimum of 5 years, and states that if Cordero passes on during the life of the investment, "Brenda (who was also present at our meeting) plans on keeping the WM Flexible Income [Portfolio] as her investment." Clerk's Papers at 170.
¶ 7 Mr. Cordero died on January 11, 2002. Nadolski presented the 1997 will for probate and was named personal representative of the estate. She then began distributing assets. In March 2002, Nadolski transferred the funds in Account No. 86260144 to a new account in the same bank, under her sole name.
¶ 8 A month later, in April 2002, Cordero's niece Jane Dahle opened a new probate action and filed a will that Cordero had signed in 1998 naming Dahle as personal representative. Nadolski initiated a will contest with respect to this will. The matter went to binding arbitration, and the arbitrator found in favor of the 1998 will. Thereafter, the King County Superior Court affirmed the arbitration award, and directed Nadolski to deliver to Dahle the assets Nadolski previously had distributed, including the proceeds of Account No. 86260144 that she had transferred to her sole name.
¶ 9 But following reconsideration, the trial court awarded the account to Nadolski instead, based on the fact that Cordero had, after executing the 1998 will, and by signing the switch rationale, reaffirmed in writing that Nadolski was to be his joint tenant with right of survivorship on the account, notwithstanding the contrary language in the 1998 will.
¶ 10 Dahle appeals in her capacity as personal representative of Cordero's estate.
¶ 11 Because the issue presented involves a mixed question of law and fact, our review is de novo, but we defer to the trial court's factual findings that are supported by substantial evidence, and we review independently whether the trial court has made an error of law that may be corrected upon appeal. As always, credibility determinations are for the trial court and not the appellate court. See, e.g., In re Marriage of Stern, 68 Wash.App. 922, 929, 846 P.2d 1387 (1993)
.
¶ 12 Given the issue framed and argued by the parties, we assume without holding that the trial court properly determined that the 1998 will effectively changed the beneficiary of the account from Brenda Nadolski to Cordero's estate, in accord with...
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