Oct. 16, 2023 – Statements made by a decedent two years after he created joint bank accounts with one of his daughters are admissible to help determine his intent in creating the accounts, the Wisconsin Court of Appeals District IV has ruled in Henke v. Estate of Clarence E. Klawitter, 2022AP2036 (Oct. 12, 2023).
In 2010, Clarence Klawitter’s son Brian died. Brian had been living with his father to help with both the family farm and the older man’s finances.
After Brian died, Joan, Clarence’s sister-in-law, suggested that he have one of his four daughters added to his bank account in case he needed help with his finances.
In April 2011, Clarence added his daughter Carla to both his checking and savings accounts.
Clarence and Carla each signed separate signature cards, one for each account.
On each of the four signature cards, someone ticked a box that designated the account as a “Joint Account.”
Next to that box was the following wording: “This Account is jointly owned by the parties named hereon. Upon the death of any of them, ownership passes to the survivor(s).”
Sister Learns of Accounts
Jennifer, one of Carla’s three sisters, learned in 2012 or 2013 that Carla was named on the account.
Jennifer later testified that Clarence told her that he’d added Carla to the accounts in case something happened to him and he was unable to write checks.
Clarence had an attorney draw up an estate plan in 2013, at the urging of his daughters. But he never signed the documents.
Clarence died in 2021. In the ten years that Carla was named on her father’s two bank accounts, she made no deposits or withdrawals.
After Clarence died, his estate (Estate) went to probate in Marquette County Circuit Court.
During probate, the Estate contested Carla’s ownership of the $82,000 in the two bank accounts.
The Estate argued that Clarence hadn’t intended to make Carla a joint owner of the funds when he added her to the bank accounts in 2011.
The circuit court ruled that while the joint accounts created in 2011 presumptively included survivorship rights, the Estate had rebutted the presumption.
Different Types of Joint Accounts
Writing for a three-judge panel, Judge Rachel Graham began her opinion by explaining that under Wis. Stat. sections 705.03(1) and 705.04(1), the law presumed that Clarence and Carla had created joint accounts with a right of survivorship because the wording on the signature cards complied with section 705.02(1)(a).
However, she pointed out that under Wisconsin Supreme Court case law, joint bank accounts can serve multiple purposes. As a result, the presumption that the two accounts had survivorship rights was rebuttable, Graham concluded.
Judge Graham explained that Clarence’s intent at the time he created the joint accounts governed whether the accounts had survivorship rights.
Carla argued that statements made by Clarence after he created the joint accounts in 2011, while possibly relevant, were inadmissible hearsay.
She also argued that, alternatively, statements made by Clarence after he created the joint accounts were not probative of his intent in creating the accounts in 2011.
Post-creation Statements Probative
But Judge Graham reasoned that Clarence’s post-2011 statements could be probative because under Wisconsin evidence law, mental states can stay the same over time.
“Depending on the facts of a given case and the strength of the available evidence, a fact finder may be able to infer from a party’s post-creation expressions of their post-creation intention that the party held the same intention at the time the account was created,” Graham wrote.
Judge Graham acknowledged that statements made by Clarence close in time to when he created the joint accounts might have more probative value than later statements.
But assessing that value was a form of weighing the evidence reserved to the circuit court, Graham concluded.
“Wisconsin law does not support the categorical exclusion of evidence post-dating the creation of a joint account on the ground that such evidence lacks any tendency to prove a party’s intention at the time the account was created,” Judge Graham wrote.
Carla argued that the circuit court erred by admitting two statements made by Clarence in 2013 – statements in which he said that he didn’t need to complete the proposed estate plan and that if he didn’t have a will, his estate would be divided equally.
But Graham concluded that the statements were not hearsay.
“If Clarence did not intend to assert that, as of 2013, he wanted his assets to be split evenly among his daughters and he believed that the laws of intestate succession would achieve that result, then the statements are not hearsay, and they are admissible as circumstantial evidence of Clarence’s state of mind in 2013,” Judge Graham wrote.
Carla argued that the statements at best only established Clarence’s state of mind in 2013, not 2011, when the accounts were created.
But, again, Graham pointed out that under Wisconsin evidence law, a statement about a “‘then existing’ state of mind” is admissible to demonstrate that the same state of mind existed before the statement was made.
A fact finder could infer from the 2013 statements, Judge Graham explained, that it was less likely that Clarence intended Carla to have survivorship rights in the accounts when he added her to them in 2011.
Accounts of Convenience
Graham also concluded that Clarence’s 2013 statement to Jennifer that he’d added Carla to accounts in case something happened to him and he couldn’t write checks was admissible to prove Clarence’s state of mind in 2013, either because it wasn’t hearsay or qualified for the hearsay exception in section 908.03(3).
Judge Graham also concluded that the circuit court’s finding that the Estate’s evidence was sufficient to rebut the presumption that the joint accounts had a right of survivorship was not clearly erroneous.
“From all the evidence, the circuit court could have reasonably inferred that Clarence followed through on Joan’s advice to add one of his daughters to the accounts to create accounts of convenience,” Graham wrote.