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Succession of Angus: Louisiana’s Take on TOD Beneficiary Designations
Title: Louisiana Court Affirms TOD Designation Invalidity in Estate Dispute
Meta Description: Louisiana appellate court invalidates TOD beneficiary designation for brokerage account, emphasizing public policy and will precedence in estate planning.
In the Succession of Angus, the Court of Appeal of Louisiana addressed a dispute over the validity of a Transfer on Death (TOD) beneficiary designation for a brokerage account. The case centered around the estate of Evlyn Northington Farris Angus, who passed away in 2019, leaving a will that provided specific bequests to her children and designated her husband, Ronald Angus, as the residual legatee. The litigation arose when the TOD designation form for a brokerage account conflicted with the terms of her will.
Evlyn and Ronald Angus had been married for decades and held various assets within their community property, including a brokerage account with John Hancock Signature Services, Inc. Shortly before executing her will in 2010, Evlyn signed a TOD form naming her daughter Diann and granddaughter Laura as equal beneficiaries of the account. However, her subsequent will made no mention of the TOD form and left the remainder of her estate to Ronald Angus.
Trial Court Proceedings
After Evlyn’s passing, Ronald Angus filed a petition to declare the brokerage account part of the community property and, as residual legatee, sought control of the account’s funds. The trial court held that the TOD form was invalid under Louisiana law, as the state had not recognized such designations as valid nonprobate transfers for brokerage accounts. Instead, the court found that Louisiana law prioritized the transfer of assets through testate or intestate succession, aligning with the terms of Evlyn’s will.
The court emphasized that the TOD form did not meet the formal requirements for donations under Louisiana law and that public policy favored upholding wills over informal beneficiary designations. Based on these findings, the trial court ordered the proceeds of the brokerage account to be turned over to Ronald Angus.
Appeal and Ruling
The defendants, Laura and her mother, Jane, appealed the trial court’s decision, arguing that the TOD form constituted a valid contractual arrangement under the laws of Massachusetts, as stipulated in the form’s choice-of-law provision. They also claimed the trial court erred in dismissing their equitable estoppel defense, asserting that Ronald Angus had consented to the TOD designation by signing the form.
The Louisiana appellate court affirmed the trial court’s judgment, ruling that the TOD form was invalid under state law. The court highlighted several key considerations:
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Public Policy and Succession Law: Louisiana succession law strongly favors asset distribution through testate or intestate succession, with only a few exceptions for specific nonprobate transfers, such as life insurance and retirement accounts. The court determined that TOD designations for brokerage accounts were not among these exceptions.
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Will Supremacy: The court underscored that Evlyn’s will, executed after the TOD form, clearly expressed her intent to leave the remainder of her estate to her husband. Allowing the TOD designation to override her will would contravene her explicit intentions.
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Equitable Estoppel Defense: The court rejected the defendants' estoppel argument, noting that Laura, as a third-party beneficiary, did not meet the criteria for equitable estoppel. The evidence suggested that Evlyn intended for the account’s proceeds to remain with her husband until both had passed.
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Choice-of-Law Provision: While the TOD form included a Massachusetts choice-of-law clause, the court held that enforcing this provision would contravene Louisiana public policy. As a result, the clause did not override state succession laws.
Implications
The ruling in Succession of Angus highlights the importance of aligning estate planning tools with state laws. Louisiana’s unique civil law tradition prioritizes formal wills and succession processes over informal designations, reinforcing the need for clear and comprehensive estate planning. This case serves as a reminder for individuals to ensure that all estate planning documents are consistent and legally enforceable within their jurisdiction.
Plan for the Future with Confidence
Estate disputes like those in Succession of Angus underscore the importance of meticulous estate planning. At Whitcomb Selinsky PC, our attorneys are dedicated to helping you navigate the complexities of wills, probate, and succession laws. Whether drafting a will or resolving a dispute, we provide the expertise you need to protect your legacy. Visit our estate planning page to learn how we can assist you in safeguarding your family's future.