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On rehearing, panel clarifies ruling regarding Death Property Act

September 23, 2014

A promissory note between a mother and son did not transfer to the mother’s estate on her death, the Indiana Court of Appeals clarified in rehearing an estate dispute that reversed a trial court ruling.

“Ind. Code chapter 32-17-14 does not define ‘pay on death account,’ but it does define ‘security’ as ‘a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issuer,’” Judge Melissa May wrote for the majority in In re the Estate of Ruth M. Rupley, Charles A. Rupley v. Michael L. Rupley, 71A05-1306-ES-288.

“Whether the note was a ‘pay on death account’ or a ‘transfer on death security,’ the Act applied retroactively to it and the note was not an asset of the Estate. We therefore grant rehearing and reaffirm our original opinion,” the panel held.

In the original appeal, the majority ruled the $72,500 Charles Rupley borrowed in 2006 from his mother in the form of a promissory note did not transfer upon his mother’s death to the estate.

Judge Patricia Riley agreed that the note wasn’t an asset of the estate, but she wrote that the panel incorrectly applied the Transfer on Death Property Act. Riley would have denied rehearing.
 

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