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Rabin Kammerer Johnson Settles Dispute over Ownership of Decedent’s Account for $606,000

Rabin Kammerer Johnson represented an elderly caretaker (“Caretaker”) for a 90-year old woman who passed away on April 27, 2016 (“Decedent”).  The Decedent lacked any surviving, immediate family. The Caretaker had worked with the Decedent for over 10 years and they had become close friends.

The only relative with whom Decedent previously had a close relationship was a first cousin (“First Cousin”), who predeceased the Decedent by several years. The First Cousin had an adult son (“Cousin’s Son”) who had little contact with Decedent.

In 2014, the Decedent retained an estate planning lawyer to create a testamentary trust to hold her assets. The original beneficiary of the trust was the Cousin’s Son. But as time passed, and she had no contact with the Cousin’s Son, the Decedent amended her trust to make the Caretaker the sole beneficiary instead of the Cousin’s Son.

By 2015, the Decedent’s assets in her securities accounts at a major brokerage firm had grown to over $1 million. 99% of her assets were held in a Transfer-on-Death (TOD) account with rights of survivorship. The TOD beneficiaries on the account since 2008 were listed as the First Cousin and the Cousin’s Son.

After the First Cousin had passed, the Decedent informed her financial advisor at the brokerage firm that she wanted to make the Caretaker the sole beneficiary of her TOD account by changing the ownership of her TOD account to be re-titled in the name of the Decedent’s trust. The Decedent had recently amended her trust to make the Caretaker the sole beneficiary of her trust.

Instead of following the Decedent’s instructions, however, the financial advisor filed an elder abuse complaint against the Caretaker with the internal Elder Abuse Unit at the brokerage firm. The financial advisor did not notify the Decedent that she had done so. The Elder Abuse Unit filed a complaint with the Palm Beach County Sheriff’s Office, launched an elder abuse investigation that lasted a few months.

After a two-month investigation, PBSO dropped the elder abuse investigation for lack of evidence, but the brokerage firm still failed to re-title Decedent’s TOD account in the name of Decedent’s trust.

In late April 2016, the Decedent became aware that the brokerage firm had never honored her request to re-title the account. On April 26, 2016, the Decedent informed her estate planning lawyer about this. The lawyer, with the Decedent present in his office, called the financial advisor by phone to demand that the firm immediately convert the title of Decedent’s TOD account into the name of her trust. The broker assistant took the call and misrepresented that only the financial advisor could make such a change and she was unavailable. At the end of the call, the Decedent’s lawyer e-mailed the broker assistant and financial advisor that the Decedent’s intent was to have the TOD’s account re-titled into the name of her trust.

What the Decedent and her lawyer did not know was that the brokerage firm did not immediately process the Decedent’s request. Instead, behind the scenes, the financial advisor and broker’s assistant attempt to re-launch the elder abuse investigation against the Caretaker that the PBSO had dropped for lack of evidence 6 months earlier.

The next day, on April 27, 2018, the supervisor of the Elder Abuse Unit at the brokerage firm told the financial advisor and broker assistant that prior investigation was closed and there was no basis to deny the Decedent’s request to re-title her TOD account into the name of her trust. Accordingly, the broker assistant begrudgingly, on April 27, sent new account documents to Decedent for overnight delivery.

Shockingly, during the evening of April 27, while the Decedent was eating dinner with a friend in her assisted-living-facility dining hall, she choked on a piece of food and passed away.

In the weeks that followed, the Caretaker retained Rabin Kammerer Johnson to investigate whether the brokerage firm had re-titled Decedent’s TOD account into the name of her trust, as she requested before she died. Rabin Kammerer Johnson learned that the brokerage firm had not re-titled the account and intended to follow the instructions in the 2008 beneficiary form that designated the First Cousin’s estate and the Cousin’s Son as the sole beneficiaries of the $1 million in the account.

On behalf of the Caretaker, Rabin Kammerer Johnson filed a declaratory-judgment lawsuit in federal court and the brokerage firm filed a counterclaim for statutory interpleader, named the First Cousin’s estate and the Cousin’s Son as third-party defendants. Ultimately, the brokerage firm deposited the funds into the court registry, the brokerage firm was dismissed from the interpleader case, and the Caretaker litigated the ownership dispute with the First Cousin’s estate and the Cousin’s Son.

The difficulty of the case for the Caretaker was that the new account forms arrived at the Decedent’s home the morning after she passed away. The First Cousin’s estate and the Cousin’s Son argued that the strict compliance was required to change the ownership or beneficiaries on the TOD account.

In contrast, the Caretaker argued that the Decedent had conveyed her intent to the brokerage firm to change the account’s ownership to her trust and that only “substantial compliance” was required once the brokerage firm was dismissed from the interpleader case. The Caretaker argued that the Decedent’s submission of the one form she had constituted substantial compliance. The challenge was that the Decedent did not fill out the numerous other required forms that were received the day after she passed and, therefore, she could not demonstrate strict compliance.

After 10 months of litigation, Rabin Kammerer Johnson obtained a favorable settlement for the Caretaker, where she received $606,000 (60%) of the $1 million in account assets. Rabin Kammerer Johnson is proud of this result, not only because of the benefit its client received, but also because it was the genuine intent of the Decedent before she passed for the client to receive her account assets.

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