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COURT OF APPEALS DECISION DATED AND RELEASED March 19, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-1771
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
BANK ONE, MILWAUKEE,
NA,
Plaintiff-Respondent,
v.
JON-PIERRE FUEGER,
DANIELLE M. SCHUTZ and
MICHELLE A. DIEHL,
Defendants-Respondents,
KATHLEEN LARGET and
GREGORY KUBASH,
Defendants-Third Party
Plaintiffs-Appellants,
v.
THE ESTATE OF GISELE
KUBASH,
Third Party Defendant-Respondent.
APPEAL from judgments of
the circuit court for Milwaukee County:
MICHAEL J. BARRON, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Cane, JJ.
PER CURIAM. Kathleen Larget and Gregory Kubash appeal
from two judgments dismissing their claims against Bank One and Jon-Pierre
Fueger, Danielle M. Schutz and Michelle A. Diehl. The judgments were entered after the trial
court granted Fueger, Schutz and Diehl's motion for summary judgment in an
interpleader action initiated by Bank One.
Because the trial court did not err in granting summary judgment to
Fueger, Schutz and Diehl, we affirm.
I. BACKGROUND
Larget's and Kubash's
father, Emil Kubash, opened an IRA account with Bank One. He named his wife, Gisele Kubash, as
beneficiary and his children from a previous marriage (Larget and Kubash) as
contingent beneficiaries for any remainder amount. On July 30, 1987, at age 73, Emil died. Gisele continued to receive monthly payments
of $750 from the IRA account. In
August 1993, Gisele withdrew the balance of $63,071.51 from her deceased
husband's IRA and deposited that amount the same day to establish an IRA in her
own name. Gisele named her own children
from a previous marriage (Fueger, Schutz and Diehl) as beneficiaries on the
account. Gisele died in
August 1994. At that time, the
redemption value of her IRA was $56,351.72.
Both Gisele's children
and Emil's children made a claim for these proceeds. Bank One initiated an interpleader action to determine who should
receive the money. Both sides filed
motions for summary judgment. Gisele's
children argued that federal regulations, the Internal Revenue Code and the IRA
adoption agreement signed by Emil clearly permitted Gisele to treat the IRA as
her own and name her own beneficiaries.
Thus, they requested that the trial court grant summary judgment in
their favor. Conversely, Emil's
children argued that his will and the marital property agreement evidenced
Emil's intent for his children to receive any remainder amount and forbid
Gisele from treating the IRA as her own and changing the beneficiaries. The trial court agreed with Gisele's
children. Emil's children now appeal.
II. DISCUSSION
Summary judgment
methodology has been so often repeated that we decline to do so here. See Voss v. City of Middleton,
162 Wis.2d 737, 748, 470 N.W.2d 625, 629 (1991). We note only that our review is de novo. Id. The pivotal question raised in this appeal is what should
prevail: the Internal Revenue Code and
the Individual Retirement Account Plan that Emil entered into with Bank One or
the intentions evidenced by Emil's will and marital property agreement. The trial court addressed this question and
concluded:
As
I can see here, the marital agreement and the will of Emil Kubash are really a
smoke screen and really have nothing to do with this case.
The
reason I say that is that the marital agreement provides that Emil's will shall
control concerning the distribution of the IRA account. So there goes the marital agreement.
The
will gives--that is, if there's any differentiation between the two, the will
gives Gisele all the benefits from an IRA adoption agreement said benefits
being outlined in said agreement which is incorporated herein and made a part
hereof.
So
the will, therefore, is meaningless because what the will does is says she gets
all the benefits from that IRA which are outlined in whatever agreement Emil
had with the Bank which is incorporated and made a part of the will. So the will means nothing.
So,
therefore, what you have to do is to check and find out what the adoption
agreement between the parties are along with federal tax law. All adoptions of beneficiary agreements are
subject to federal tax law; and the beneficiaries in such an agreement, they
are not subject to any probate estate.
....
The decision is controlled by whether federal
law and the IRA adoption agreement permitted Gisele after his death to convert
his IRA to one of her own.
The
trial court went on to conclude that federal law and the IRA adoption agreement
permitted Gisele to treat Emil's IRA as her own and, therefore, she could
legally name her own beneficiaries. The
trial court also determined that this conclusion does not violate the will or
marital property agreement because both documents indicate that “they're in
effect subject to the [IRA] adoption agreement that [Emil] had.”
We have reviewed all the
relevant documents in this case and conclude that the trial court did not err
in granting summary judgment to Gisele's children. The marital property agreement clearly directs the reader to the
will with respect to the IRA account.
The will specifically states: “I
further give and bequeath to my beloved wife, GISELE KUBASH, all of the
benefits from an Individual Retirement Account Adoption Agreement, at the [Bank
One], said benefits being outlined in said agreement, which is incorporated
herein and made a part hereof.” The IRA
adoption agreement mandates that the IRA must be consistent with federal tax
law. Both federal tax law and Bank
One's IRA adoption agreement provide that a spouse beneficiary may treat a
deceased spouse's IRA account as her own.
See Treas. Reg. § 1.408-2(b)(7)(ii)(1980). This is exactly what Gisele did.
Accordingly, Gisele's
election was consistent with federal law distribution regulations relevant to
IRA's. It was also consistent with the
terms of the IRA adoption agreement that Emil entered into with Bank One. Moreover, Gisele's action was not in
conflict with Emil's will. The will
specifically provided that Gisele should receive all the benefits of the IRA as
outlined in the IRA adoption agreement.
Therefore, we affirm the judgments of the trial court.[1]
By the Court.—Judgments
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.