Background
William E. “Bill” Perrine died intestate in February 2024, survived by his wife, Nancy Bobo Perrine, and four adult children. Bill owned approximately $2.33 million in an IRA and an investment account at Schwab, both bearing transfer-on-death beneficiary designations favoring his children. He retained control of the accounts during his lifetime, including the ability to withdraw funds and change beneficiaries.
Shortly before Bill’s death, his son Robin, acting under a power of attorney, caused seven $18,000 checks to be issued from the investment account to Bill’s children and grandchildren. Nancy, who had not agreed to the beneficiary designations or gifts and had not waived her dower rights, sued for declaratory relief, fraud on dower, conversion, and a constructive trust. The Fayette Circuit Court granted her partial summary judgment, concluding that the accounts were part of Bill’s surplus personalty and that the children had not rebutted the presumption that the dispositions were intended to defeat Nancy’s dower interest.
The Court’s Holding
The Kentucky Court of Appeals affirmed. It held that transfer-on-death accounts may qualify as personalty possessed by a decedent at death and therefore fall within the surviving spouse’s statutory right to one-half of the surplus personalty under the version of KRS 392.020 in effect when Bill died. The accounts’ nonprobate character did not remove them from the statute because the beneficiary designations had no effect on ownership until death, while Bill retained complete control over the assets during his lifetime.
The court rejected the children’s argument that Bill established his estate plan before marrying Nancy. No property was transferred when the beneficiary designations were initially made; the children held only expectancy interests until Bill’s death. Moreover, beneficiary designations executed on Bill’s behalf during the marriage renewed the decision to exclude Nancy.
Because the beneficiary designations diverted nearly all of Bill’s personalty from Nancy without her consent, and substantial gifts were made from the account shortly before his death, the circumstances supported a presumption that Bill intended to defeat her dower rights. The children failed to rebut that presumption. Nancy was therefore entitled to one-half of the value of the transfer-on-death accounts and one-half of each inter vivos gift made to the recipients.
Key Takeaways
- A transfer-on-death designation does not necessarily shield an account from a surviving spouse’s statutory dower claim in Kentucky.
- When the owner retains complete control until death, a nonprobate account may remain personalty possessed by the decedent for purposes of KRS 392.020.
- Diverting nearly all personalty to children without the spouse’s consent can create a presumption of fraud on dower that beneficiaries must rebut.
Why It Matters
The decision confirms that Kentucky courts look beyond the probate or nonprobate label and examine who owned and controlled the property at death. Transfer-on-death designations cannot be used to accomplish indirectly what Kentucky’s statutory dower protections prohibit directly.
For estate planners and fiduciaries, the opinion highlights the risks of beneficiary changes and substantial deathbed gifts that exclude a surviving spouse, particularly when an agent acting under a power of attorney directs the transactions.