Rubeck v. American Fletcher National Bank & Trust Co.

ROBERTSON, Presiding Judge.

Objector-appellant Alma Rubeck (Alma) appeals from the decision of the Monroe Circuit Court overruling Alma's objection to the final accounting submitted by petitioner-appellee American Fletcher National Bank and Trust Company (AFNB), executor of the estate of D. Eugene Rubeck.

We reverse.

The sole issue raised on appeal is whether the trial court erred in finding that the income tax refund check for the tax year 1978 was properly included by AFNB as an asset of the decedent's estate. The facts relevant to that issue are summarized as follows. Alma Rubeck was married to the decedent, D. Eugene Rubeck, for more than twenty years prior to the decedent's death in June, 1984. Alma and the decedent filed joint federal tax returns each year during their marriage. The tax return for 1978 was audited, and an adjustment was made entitling the Rubecks to a refund of $65,839.50 together with interest in the amount of $31,612.83. In 1984, after D. Eugene Rubeck had died, the Internal Revenue Service issued the refund check for $96,952.88 payable to D. Eugene Ru-beck and Alma Rubeck.

Alma contends that she is entitled to the entire proceeds of the income tax refund check for the tax year 1978, because the check was payable to her and her deceased husband. AFNB maintains that the check should be included in the estate, because all the income generated during the tax year 1978 was earned by the decedent and no income was reported by Alma. Both parties agree that state law determines ownership of funds received with respect to income reported on a joint federal income tax return. See Graver v. Illinois Department of Public Aid, (1978) 64 Ill.App.3d 820, 21 Ill.Dec. 597, 381 N.E.2d 1044; In re Estate of Carson, (1964) 83 N.J.Super. 287, 199 A.2d 407; In re Estate of Trecker, (1974) 62 Wis.2d 446, 215 N.W.2d 450.

Indiana's joint tenancy statute governs the ownership rights in the tax refund check payable to Alma and the decedent. IND. CODE § 82-4-1.5-15 (1982) provides:

Personal property, other than an account, which is owned by two (2) or more persons is owned by them as tenants in common unless expressed otherwise in a written instrument. However, household: goods acquired during coverture and in possession of both husband and wife, and any promissory note, bond, certificate of title to a motor vehicle, or any other written or printed instrument evidencing an interest in tangible or intangible personal property other than an account, in the name of both husband and wife, shall upon the death of either become the sole property of the surviving spouse unless a clear contrary intention is expressed in a written instrument.

IC. § 82-4-1.5-15 preserves the nineteenth century preference for tenancy in common. See 2 Rev.Stat. of 1852, p. 245. Certain marital property is excepted, however, and a preference for survivorship between spouses is declared. The marital property exception embraces household personal property and property that is either paper or evidenced by paper.

AFNB suggests that the marital property exception of I.C. § 82-4-1.5-15 applies only to written instruments supporting an inference that one spouse intended to make a gift or specific conveyance to the other spouse. Because no inference of an intent to make a gift or conveyance can be drawn from the refund check, AFNB reasons that the check was not within the seope of the marital property exception. AFNB's argument represents a departure from the statutory language. 1.C. § 82-4-1.5-15 requires no showing of donative intent or transfer. As between husband and wife, the mere use of the joint names carries with it the right of survivor-ship unless an intention to the contrary is clearly expressed in a written instrument. Robison v. Fickle, (1976) 167 Ind.App. 651, 665, 340 N.E.2d 824, 833; see also Lester v. Lester, (1974) 160 Ind.App. 671, 313 N.E.2d 357.

The income tax refund check for the tax year 1978 constituted a written instrument evidencing an interest in tangible or intangible personal property, other than an account, in the names of both husband and wife. Upon the death of D. Eugene Ru-beck, the refund check became the property of Alma Rubeck.

Judgment reversed.

NEAL, J., concurs. RATLIFF, J., dissents with separate opinion.