Chapter 53 - § 53.20 • PROBATE COURT JURISDICTION REGARDING NON-PROBATE ASSETS

• Jurisdiction: Colorado

§ 53.20 • PROBATE COURT JURISDICTION REGARDING NON-PROBATE ASSETS

In Sandstead-Corona v. Sandstead, 415 P.3d 310 (Colo. 2018), a dispute between two daughters (Corona and Sandstead) of the decedent, Corona brought claims against her sister, Sandstead, related to their parents' estate. Corona filed an action for surcharge against Sandstead for breach of her fiduciary duty related to pre-death and post-death gifts, expenditures from joint bank accounts, and distributions of money.

The facts of this case are complicated by the multiple hearings and orders, but, essentially, the case can be reduced to two issues:

1) Whether the trial court had jurisdiction over multiple-party accounts and to impose a constructive trust on non-probate assets; and
2) Whether the trial court erred in enforcement of the penalty clause in a trust (see § 53.8 in this chapter).

Shortly after the surcharge was filed, Sandstead filed a motion in limine to prohibit evidence regarding the transfer of $230,000 from a Wells Fargo joint tenancy account in Sterling, Colorado, to a joint tenancy account in Citizen's Bank in Boston. Because the transfer occurred prior to her mother's death and was a joint account, Sandstead asserted that the court lacked jurisdiction in her mother's estate to hear the pre-death claims.

The trial court initially granted the motion in limine, finding that the court lacked jurisdiction regarding claims against Sandstead individually. Later in the course of the proceedings, the judge reversed his prior order and permitted Corona to bring a surcharge action against Sandstead for her malfeasance related to the joint account prior to her mother's death.

With regard to the jurisdictional issue, on appeal Sandstead asserted that the trial court erred in surcharging her for actions related to a joint bank account created prior to her mother's death and prior to her appointment as personal representative because the money was not estate property. The court of appeals reversed the trial court's surcharge against Sandstead related to pre-death transfers, finding there was no evidence that Sandstead exercised her authority as agent under the power of attorney. The court of...