How to Resolve Account Issues When a Member Dies Presented By: - - PowerPoint PPT Presentation

How to Resolve Account Issues When a Member Dies

Presented By:

Robert Rutkowski, Esq.

2 | Death of a Member

Introduction

• Problems with paying out money.
• Problems with collecting money.

3 | Death of a Member

Introduction

• Probate Process
• Trust Distribution Process
• Credit Union Accounts and Member Death
• Credit Union Loans and Member Death
• Claims & Remedies

– Making an unsecured claim against the estate – Making an unsecured claim against trust assets – Interpleader – Fraudulent transfers

The Probate Process

5 | Death of a Member

The Probate Process

• Probating of the will
• Appointment of the fiduciary
• Marshaling assets
• Paying claims
• Distribution to heirs

The Trust Distribution Process

7 | Death of a Member

The Trust Distribution Process

• Trustee follows instructions of trust documents.
• Creditor must be quick to assert claims.
• No court supervision.

Credit Union Accounts and Member Death

9 | Death of a Member

Joint Survivorship Accounts

• Do not allow members to be confused about joint with

right of survivorship (JWROS) accounts as vehicles for probate

– All members have total access to account immediately – There must be a signed and dated agreement by all persons indicating intent when shares were issued or thereafter – Not a “convenience account” because it creates an ownership interest in the funds.

10 | Death of a Member

Joint Survivorship Accounts

• If one party dies, remaining party is new owner
• Death of all owners, save one, terminates account

11 | Death of a Member

Death of Joint Owner

• If surviving joint owner is minor, the minor shall be

considered as being of the age of majority and having contractual capacity

• Check with Executor of estate

12 | Death of a Member

Death of Joint Owner

• If life savings insurance is on file, must file claim for

proceeds

– Proceeds disbursed to beneficiary – Require death certificate – Check credit union (CU) procedures

13 | Death of a Member

Death of Joint Owner

• If surviving joint owner ineligible for membership,

disburse remaining funds to joint owner

14 | Death of a Member

Joint Survivorship Accounts

• Creating joint account without Right of Survivorship

– Upon death, funds belong to deceased owner’s estate, designated beneficiary and/or surviving account owners – NOT advisable

15 | Death of a Member

Payable on Death (POD) Membership Accounts

• Member enters into contract: member may designate

beneficiary who will receive funds when account owner dies

16 | Death of a Member

POD Membership Accounts

• Account owner(s) retains sole ownership of account and
• nly he/she may withdraw proceeds or change

beneficiary during his/her lifetime

• If more than one holder of the account, knowledge or

consent of withdrawal or deposit of any part or all of the account at any time is NOT needed

17 | Death of a Member

POD Membership Accounts

• Beneficiary’s interest does not vest until owner’s death
• Advantage: designated by statute to avoid probate upon
• wner’s death

18 | Death of a Member

• Funds payable to beneficiary are not part of owner’s

estate

– May be subject to inheritance or other taxes – More than one beneficiary: hold account in equal shares as tenants in common with no rights of survivorship

POD Membership Accounts

19 | Death of a Member

Setting Up a POD Account

• Execute a dated written statement with institution

expressing the intent of the ward (member) to establish a POD account

20 | Death of a Member

Setting Up a POD Account

• Can set up joint owner trust account

– If one owner dies, money goes to other owner

• Owner may be adult or minor, but must be a natural

person

21 | Death of a Member

POD Membership Accounts

• Owner makes withdrawals/deposits as desired- retains

complete control of POD account

• Ability to use funds as security unaffected

– Debts secured by POD funds paid first

22 | Death of a Member

POD Membership Accounts

• Owner may designate person, entity, or organization as

beneficiary

• Owner retains complete control over who account

beneficiaries are

– May change designated person at any time for any reason – Do not need to obtain consent to do so

23 | Death of a Member

POD Membership Accounts

• Beneficiary has no right to funds until owner’s death
• CU must keep owner’s beneficiary confidential

24 | Death of a Member

Disbursing Funds to Beneficiary upon Owner’s Death

• Obtain copy of death certificate
• Notify beneficiary for written request of funds in account

25 | Death of a Member

• Require beneficiary to provide proper ID

– Hold funds if any doubt

Disbursing Funds to Beneficiary upon Owner’s Death

26 | Death of a Member

POD Membership Accounts

• If savings insurance providing matching insurance

coverage for deposited funds in POD account, CU must file claim for insurance proceeds only

27 | Death of a Member

• Carrier disburses proceeds to individual or entity on POD

card/designated beneficiary

• If beneficiary is minor, proceeds may only be paid to the

minor unless guardian is appointed as the minor shall be considered as being of the age of majority and having contractual capacity

POD Membership Accounts

28 | Death of a Member

POD Membership Accounts

• Get approval by Treasurer or other authorized CU

personnel prior to distributing funds

• Remember, you can have more than one beneficiary!

29 | Death of a Member

POD Membership Accounts

• Do not confuse beneficiary set for IRA accounts -- they

are separate and distinct

30 | Death of a Member

• Joint Accounts & POD’s are taxed pursuant to the

Federal Tax scheme

– If probate estate is LESS THAN $5.34 million, no taxes – If probate estate is MORE THAN $5.34 million, the estate will be taxed

Federal Estate Tax 2014

31 | Death of a Member

• Affidavit of surviving spouse (some jurisdictions or to be

safe)

• Death certificate(s)
• ID (driver’s license)

Requirements for Survivorship Features of Accounts

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• Make copies of all forms of ID
• Execute check/draft to surviving spouse in his/her name

as beneficiary of deceased owner’s account

Requirements for Survivorship Features of Accounts

33 | Death of a Member

• For beneficiary in POD accounts similar to survivorship

accounts, need

– Death certificate – Beneficiary ID – To make copies of all documents – To execute check/draft to beneficiary

Effect of Death

Claims and Remedies

35 | Death of a Member

Claims and Remedies

“He that dies pays all debts.”

• William Shakespeare, The Tempest
• Only if you have default causes for death
• Real value in cross-collateralization clauses

36 | Death of a Member

• Much better position than unsecured loans.
• No default unless loan agreement states death is default
• event. This is called a default on death clause.
• Otherwise, only repossess if loan is delinquent

Secured Loans (Auto, Boat, Etc.)

37 | Death of a Member

• File claim with estate
• If you do repossess, send all notices regarding sale, etc.

to estate fiduciary

Secured Loans (Auto, Boat, Etc.)

38 | Death of a Member

• Obtain following when member dies and

Administrator/Executor/Executrix appear to claim funds:

– Relevant pages or letters of administration – Court letters of testimony qualification

Effect of Death

39 | Death of a Member

• Obtain following (cont.)

– Death certificate(s) – ID of Administrator/Executor/Executrix – Check/draft for Administrator/Executor/Executrix

Effect of Death

Making an unsecured claim against the estate.

41 | Death of a Member

• Typically:

– A writing addressed to decedent and received by the executor or administrator of the estate. – After the appointment of the executor or administrator. – Before the final account is filed – Within some period of time (often within 6 months of death).

File Unsecured Claim against Estate

42 | Death of a Member

• Claim can be letter or document designated as “claim”

but must contain:

– Name of deceased member – CU name and address – Nature of debt – Amount of debt

File Claim against Estate

43 | Death of a Member

• If claim accepted, you will either be paid in the ordinary

course or if the estate is insolvent, paid a percentage of the claim or paid if assets are discovered.

• When there are not enough liquid assets to pay claims,

creditors paid according to priorities established by law and real property and other personal property may be sold to satisfy claim

Acceptance of Claim

44 | Death of a Member

• If claim rejected by fiduciary, file lawsuit for recovery
• quickly. Often you only have a period of months from the

date you received rejection.

Rejection of Claim

45 | Death of a Member

• If you receive no notice, monitor progress of settlement
• f estate
• If this lingers on, consider taking further action

Acceptance/Rejection of Claim

46 | Death of a Member

• Just because an estate is insolvent does not mean you

will not receive anything

Dynamics of Administration of an Estate

47 | Death of a Member

• File claim with insurance company and
• File claim with estate
• If insurance company pays less than full amount, you

can pursue estate for deficiency

Credit Life Insurance

Making an unsecured claim against trust assets.

49 | Death of a Member

Claims against a Trust

• Always dealing with the Trustee.
• May have right of offset.
• Need to act quickly as there is no probate court involved,

although you can involve the court if there are problems.

• Generally speaking, while a Grantor in an Living Trust is

alive, the assets of the trust are reachable.

50 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• On February 6, 2008, appellant, Brad Watterson, was

injured in an automobile accident caused by Barthel J.

• Burnard. On February 3, 2010, Watterson and his wife,

Jamie (“appellants”), filed a personal injury lawsuit against Burnard in the Lucas County Court of Common Pleas.

• On November 2, 2011, while the lawsuit was pending,

Burnard passed away. At the time of her death, there was in existence a revocable trust, the Barthel J. Burnard Trust, into which Burnard had transferred assets during her lifetime.

51 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• The trial court stated that, based on the evidence and its
• wn interpretation of existing Ohio law, appellants lost

the right to access the assets of the Barthel J. Burnard Trust when the settlor died. Accordingly, the trial court denied appellants’ request for a preliminary injunction on December 23, 2011. A timely notice of appeal was filed in this court on January 12, 2012. A jury trial was held on February 6, 2012, after which Brad Watterson was awarded a judgment of $398,000.

52 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• On appeal, appellants assert that the trial court’s denial
• f their request for a preliminary injunction was based on

an erroneous interpretation of Ohio law and the assets of the Barthel J. Burnard Trust should be available to satisfy the judgment obtained by Brad Watterson because his claim arose, and the lawsuit was filed, before Burnard’s death on November 2, 2011. Appellee responds that, pursuant to Schofield v. Cleveland Trust Co., 135 Ohio

• St. 328, 21 N.E.2d 119 (1939), Watterson’s ability to

compel revocation of the trust to satisfy his tort claim ended with the settlor’s death.

53 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• The trial court denied a motion for a preliminary

injunction to prevent the disbursement of funds from the Barthel J. Burnard Trust pending the outcome of tort litigation by appellants, Brad and Jamie Watterson, against the trust’s settlor, Barthel J. Burnard, now

• deceased. The appellants assert the trial court erred in

denying appellants’ motion for preliminary injunction and holding that appellants could not reach the assets of the decedent’s revocable trust to satisfy their judgment where appellants were prior creditors in that their causes

• f action accrued and suit was filed prior to decedents’

death.

54 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• The court looked the Restatement of the Law 3d, Trusts,

Section 25, Comment e (2003) (among other things) which states, in relevant part:

– Rights of creditor and other matters. Although a revocable trust is nontestamentary and is therefore not subject to the Wills Act or to the usual procedures of estate administration, property held in the trust is subject to the claims of creditors of the settlor or of the deceased settlor’s estate if the same property belonging to the settlor or the estate would be subject to the claims of the creditors * * *.

55 | Death of a Member

Watterson v. Burnard, 2013-Ohio 316 (Lucas County 2013)

• The Official Comment to R.C. 5805.06(A)(2) states that

the statute was intended to prevent a settlor who is also a trust beneficiary from using the trust as a “shield” against his or her creditors.

• Accordingly, the court of appeals held that the trial court

erred as a matter of law when it found that appellant could not reach the assets of the Barthel J. Burnard revocable trust to satisfy a judgment where the lawsuit was filed, but was not concluded, prior to the trust settlor’s death.

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• Always pursue jointly liable parties and cosigners for full

balance

• You can never be sure that estate or trust will pay claim

and you can always reconcile it later

Other Liable Parties

Interpleader

58 | Death of a Member

What to Do if Something is Not Right

• Notice requirement
• Waiting period for share withdrawal

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• Interpleader

– Two or more people claim interest in funds – Court action where you sue both parties to allow court to decide who gets money

What to Do if Something is Not Right

60 | Death of a Member

• Different Types of Interpleader

– Federal Interpleader

• 28 U.S.C. § 1335. Statutory Interpleader
• F.R.C.P. 22. Rule Interpleader

What to Do if Something is Not Right

61 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• This was a dispute over money that Wells Fargo

Advisors, L.L.C., was holding in two IRAs for John F. Burchfield when he committed suicide on December 16, 2009.

• In 2002, John designated his mother, appellant Gloria

Welch, and his stepfather, Bruce Leland, as beneficiaries, 75 percent and 25 percent respectively.

• On May 5, 2007, John married appellee Cynthia

Burchfield.

• Shortly before the marriage, John designated Cynthia as

the sole beneficiary on both accounts.

62 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• On October 28, 2009, John sent an e-mail to his Wells

Fargo advisor, Aaron Michael, stating that he and Cynthia were getting divorced and requesting paperwork to remove Cynthia as the beneficiary on his IRAs.

• Thereafter, by telephone, John gave Michael specifics

regarding a change in the beneficiary designation for the

• IRAs. Michael prepared change-of-beneficiary forms that

again designated Welch and Leland as the beneficiaries, 75 percent and 25 percent respectively. In addition, John’s sister, appellant Lori LeBlanc, was listed as the contingent beneficiary. Michael predated the forms “November 2, 2009” and mailed them to John, along with a self-addressed, stamped envelope.

63 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• On November 2, 2009, Cynthia filed a divorce complaint

against John. Around the same time, John spoke with Michael and informed him that the change-of-beneficiary forms were “already taken care of.”

• Approximately six weeks later, John committed suicide.

He left a note that contained a postscript in which he expressed his love for Cynthia.

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LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• After John’s death, Leland and LeBlanc asked Michael to

look through John’s financial documents to wind up John’s affairs. Around January 25, 2010, Michael and

• ne of John’s co-workers discovered the signed change-
• f beneficiary forms in an envelope among John’s

papers.

• That same morning, Michael gave the forms to his

manager at Wells Fargo. Cynthia, LeBlanc, and Welch made conflicting demands of Wells Fargo for the IRA proceeds.

65 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• In March 2010, LeBlanc2 and Welch filed a complaint against

Wells Fargo and Cynthia, seeking a declaratory judgment4 that Cynthia was not entitled to the proceeds of John’s IRAs. In turn, Cynthia sought a contrary declaration that she, as the beneficiary named on the form in Wells Fargo’s possession at John’s death, was solely entitled to the proceeds.

• In response, Wells Fargo filed an action in interpleader against

LeBlanc, Welch, and Cynthia, in which it represented that it was “unable to determine the validity of the conflicting demands.” Wells Fargo disclaimed any interest in the proceeds

• f John’s IRA accounts and offered to deposit the funds with

the court’s clerk or to maintain the account until the dispute was resolved.

66 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• The trial court granted summary judgment to Cynthia, the

beneficiary designated on the form in Wells Fargo’s possession at the time of John’s death.

• The Second District Court of Appeals affirmed. In doing

so, it emphasized that John had not complied with the Wells Fargo policy, which required that change-of- beneficiary forms be returned to the company. And it concluded that Wells Fargo had not waived compliance with its change-of-beneficiary procedure by filing an action in interpleader against the claimants.

67 | Death of a Member

LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• The Second District further held that even if other precedent on

this narrow legal point was correct and the custodian’s filing of an interpleader action waived its right to enforce the change-of- beneficiary procedure, the parties claiming to be the “clearly intended” beneficiaries must still prove that the decedent had substantially complied with the change-of-beneficiary procedure.

• In doing so, it rejected precedent that the account holder’s

clearly expressed intent controls. Accordingly, the Second District concluded that John’s failure to return the forms to Wells Fargo before his death constituted a failure to substantially comply with Wells Fargo’s procedure and that that failure was fatal to Welch and LeBlanc’s claims, without regard to John’s actual intent. It affirmed summary judgment in favor of Cynthia.

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LeBlanc v. Wells Fargo, 134 Ohio St.3d 250, 2012-Ohio-5458.

• The question certified by the Second District is: “In a

dispute between (1) a specifically designated and (2) a clearly intended beneficiary of an individual retirement account (IRA), where the account custodian files an interpleader action and purportedly waives compliance with its change of beneficiary procedure, is the ‘clearly intended’ beneficiary required to show that the owner of the IRA account substantially complied with the change

• f beneficiary procedure in order to recover?”
• The court said no.

Fraudulent Transfers

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• Uniform Fraudulent Transfers Act.
• Transfer of home to surviving relative to keep property

away from probate court.

• If transfer is made which renders person or estate

insolvent, you can file suit to have conveyance set aside.

Fraudulent Transfers

71 | Death of a Member

Fraudulent Transfers generally

• Whether the claim of the creditor arose before, or within a

reasonable time not exceed four years after, the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation in either of the following ways:

– With actual intent to hinder, delay, or defraud any creditor of the debtor. – Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and if either of the following applies:

• The debtor was engaged or was about to engage in a

business or transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction;

• The debtor intended to incur, or believed or reasonably should

have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.

72 | Death of a Member

Fraudulent Transfer Remedies Generally:

• Avoidance of the transfer or obligation to the extent

necessary to satisfy the claim of the creditor;

• An attachment or garnishment against the asset

transferred or other property of the transferee

• Subject to the applicable principles of equity and in

accordance with the Rules of Civil Procedure, any of the following:

– An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property; – Appointment of a receiver to take charge of the asset transferred

• r of other property of the transferee;

– Any other relief that the circumstances may require.

73 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• National City Bank entered into a loan agreement ("the

loan") with Ralph F. Bales, d.b.a. Buckeye Decorators,

• Inc. "whereby National City Bank loaned money to

Bales." Although the complaint alleges that "Buckeye Decorators, Inc. was never a legal entity and at all times was simply a name under which Bales did business," it nonetheless alleges that signed a personal guaranty No assets of Bales or Buckeye Decorators, Inc. secured the

• loan. Plaintiff purchased the loan from National City Bank

in December 2007.

74 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• In May 2006, Bales transferred a piece of land in

Columbus, Ohio to defendant by quit-claim deed. Bales died on February 25, 2008. In 2008, plaintiff filed a complaint against Buckeye Decorators, Inc. for failure to repay the loan; plaintiff obtained a default judgment. Before obtaining its judgment, plaintiff sent a letter to defendant on December 1, 2008, requesting information regarding what, if anything, defendant gave Bales in exchange for the property. Plaintiff never received a response to its request.

75 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• Defendant, acting as executor, opened an estate for

Bales on March 20, 2009, in the Probate Division of the Franklin County Court of Common Pleas; the probate court relieved the estate from administration that same

• day. The sole estate asset was an automobile with a

value of $12,000.

• Plaintiff then filed a complaint against defendant in 2009,

alleging that a fraudulent transfer occurred when Bales transferred the property to defendant in 2006. Plaintiff sought "a judgment *** ordering the Transfer be avoided and appointing a receiver to sell the Property and pay the proceeds of said sale to plaintiff up to the amount of the Judgment."

76 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• The trial court issued a decision and entry granting

defendant's motion to dismiss. The trial court concluded that plaintiff's "lawsuit exists solely on [the] theory that the real estate transfer was fraudulent and that title to the property should revert to Bales." With that premise, the court observed that "[p]laintiff cannot feign it is not seeking recovery of an asset of the Estate when its only hope of relief is dependent upon proof that the property belongs to the Estate." Because claims against the estate were at this point time barred, the trial court concluded that plaintiff's complaint necessarily failed to state a claim upon which relief could be granted. The court of appeals reversed.

77 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• Plaintiff's claim against defendant asserts that Bales

violated the Ohio Uniform Fraudulent Transfer Act ("UFTA"), when he transferred the property to defendant. Addressing fraudulent transfers when the creditor's claim arose either "before or after the transfer was made," R.C. 1336.04(A) presents two separate definitions of a fraudulent transfer. The statutory elements of a fraudulent transfer under R.C. 1336.04(A)(1) include " ‘(1) a conveyance or incurring of a debt; (2) made with actual intent to defraud, hinder, or delay; (3) present or future creditors.’“

78 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• Plaintiff's complaint plainly sets forth the dates Bales

transferred the property to defendant and defendant recorded the deed for the property. Plaintiff's complaint further states the date of Bales's death and the date Bales's estate was opened and closed. Accordingly, the face of the complaint allowed the trial court to consider defendant's claim that R.C. 2117.06 barred plaintiff's complaint for failure to timely present a claim to Bales's estate.

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Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• Under R.C. 1336.09(A) and (B), the statute of limitations for

plaintiff's fraudulent-transfer claim is four years from the date of the transfer. See R.C. 1336.09(C) (providing a one-year statute

• f limitations for actions under R.C. 1336.05). Plaintiff's

complaint avers that Bales transferred the property to defendant on or about May 31, 2006; plaintiff filed its complaint against defendant on May 5, 2009. Plaintiff properly contends that it filed its complaint within the four-year time period provided in R.C. 1336.09(B). The trial court concluded that even though plaintiff met the general statute of limitations for fraudulent-conveyance claims under R.C.1336.09, plaintiff nonetheless also must comply with the time constraints R.C. 2117.06 imposes for claims against a decedent's estate since the transferor-debtor Bales was deceased when plaintiff filed its complaint.

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Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• R.C. 2117.06(A) provides that "[a]ll creditors having claims

against an estate, including claims arising out of contract, out

• f tort, on cognovit notes, or on judgments, whether due or not

due, secured or unsecured, liquidated or unliquidated, shall present their claims" in one of the manners prescribed in R.C. 2117.06(A)(1). R.C. 2117.06(A)(1) provides that after the administrator or executor is appointed, and prior to a final account or certificate of termination being filed, the claim should be presented (a) to the executor or administrator in a writing, (b) to the executor or administrator in a writing and to a probate court by filing a copy of the writing with the court, or (c) in a writing sent by ordinary mail and addressed to the decedent, which the executor or administrator actually receives within the time prescribed in R.C. 2117.06(B). R.C. 2117.06(A)(1)(a),(b), or (c).

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Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• According to R.C. 2117.06(B), "all claims shall be presented within six

months after the death of the decedent, whether or not the estate is released from administration or an executor or administrator is appointed during that six-month period." A claim "not presented within six months after the death of the decedent shall be forever barred as to all parties," and no payment may be made on the claim. R.C. 2117.06(C). See also In re Estate of Curry, 10th Dist. No. 09AP-469, 2009-Ohio-6571, ¶9; R.C. 2117.37 (providing that a cause of action that accrues on a claim that "is contingent at the time of a decedent's death" must "be presented to the executor or administrator, in thesame manner as other claims, before the expiration of one year after the date of death of No. 09AP-9508 the decedent, or before the expiration of two months after the cause of action accrues, whichever is later").

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Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• The trial court's decision, coupled with plaintiff's response that

neither R.C. 2117.06 nor 2117.37 applies because its fraudulent-transfer claim is not against Bales or his estate but against defendant, raises at least two issues: (1) the necessary parties to an R.C. Chapter 1336 action and (2) whether a judgment against the debtor-transferor is a necessary predicate to a complaint based on R.C. Chapter 1336.

• Whatever issues plaintiff's complaint ultimately may raise, the

allegations of its complaint must be accepted as true at this stage of the proceedings on defendant's motion to dismiss. Because the complaint alleges a judgment against Bales, doing business as Buckeye Decorators, Inc., plaintiff need not join Bales's estate as a party defendant.

83 | Death of a Member

Brown Bark II, LP v. Coakley, 188 Ohio App. 3d 179, 934 N.E.2d 991, 2010-Ohio-3023 (2010).

• Based on the foregoing, the trial court erred in construing

plaintiff's fraudulent-transfer claim as subject to the time limits in R.C. 2117.06. Because the sole basis of the trial court's decision granting defendant's motion to dismiss was the timeliness of the claim under R.C. 2117.06, we sustain plaintiff's sole assignment of error, reverse the judgment of the Franklin County Court of Common Pleas, and remand for further proceedings consistent with this decision.

84 | Death of a Member

Questions & Answers

• Any questions?

85 | Death of a Member

Thank you

• Contact Me

Robert Rutkowski

Attorney at Law P.O. Box 470187 Broadview Heights OH 44147 Phone: 216.255.5161 Fax: 216.588.1258 email: rob@robertrutkowski.com

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