IN THE MATTER OF THE ESTATE OF JOSEPH C. GANTNER III, Deceased RACHEL GANTNER, Appellant.
from the Iowa District Court for Linn County, Sean
surviving spouse appeals the denial of an application for
temporary spousal support. AFFIRMED.
Benjamin M. Lange of Swisher & Cohrt, P.L.C.,
Independence, for appellant.
M. Stensland and Crystal R. Pound of Simmons Perrine Moyer
Bergman PLC, Cedar Rapids, for appellees.
case requires us to determine whether a decedent's
individual retirement accounts (IRAs) may be used to pay an
allowance to a surviving spouse who was not a beneficiary of
those IRAs. The spouse argues that under Iowa Code section
633D.8, she may reach the IRAs because they were "a
transfer at death of a security registered in beneficiary
form." We conclude otherwise. In our view, an IRA is a
multifaceted crystallization of federal tax law. It is not a
security or securities account registered in beneficiary form
whose ownership automatically transfers to a beneficiary on
death. Accordingly, we affirm the judgment of the probate
Background Facts and Proceedings.
Gantner died on December 10, 2015, survived by his wife,
Rachel Gantner, and two daughters, Meredith and Paige
Gantner, aged twenty-three and twenty years old. Joseph had
previously executed a will that provided for the distribution
of his personal property and established a trust for the
benefit of his daughters. The will also left ninety percent
of Joseph's residual estate to his daughters.
Joseph's will was admitted to probate on February 2,
2016, and a bank was appointed executor that same day.
February 16, Rachel Gantner filed for an elective share of
Joseph's estate and also requested a spousal support
allowance. See Iowa Code §§ 633.236, .374
(2016). In her application for spousal support, Rachel sought
a $4000 per month allowance based on her station in life and
living arrangements during the marriage.
and Paige jointly resisted Rachel's application for
spousal support. Of particular relevance to this appeal, the
daughters maintained that several retirement accounts did not
constitute part of the probate estate and were therefore
beyond the reach of Rachel's spousal allowance. The
daughters also submitted an unsigned and undated prenuptial
agreement between Joseph and Rachel that purported to waive
spousal support rights.
preliminary inventory of Joseph's estate was filed by the
executor. The report indicated that Joseph individually owned
real estate in Cedar Rapids and jointly owned real estate in
Hiawatha with Rachel. The report also showed Joseph as
holding three separate retirement accounts-two IRAs and one
account identified on the report as an "SEP with
Hartford Funds, " presumably a simplified employee
pension IRA (SEP IRA). The executor
valued the accounts at a combined $214, 100 and confirmed
that Meredith and Paige were their cobeneficiaries.
probate court held an unreported hearing on Rachel's
application for spousal support allowance on April 1. At the
hearing, it became clear that without the retirement
accounts, Joseph's estate had insufficient assets from
which to pay a spousal allowance to Rachel. Following the
hearing, Meredith and Paige filed several summary documents
concerning the three retirement accounts.
Rachel acknowledged the Gantner daughters were designated as
cobeneficiaries on all three retirement accounts, she
maintained the accounts should be deemed part of Joseph's
estate for spousal support purposes. Rachel pointed to Iowa
Code section 633D.8(1), which provides that "a transfer
at death of a security registered in beneficiary form is not
effective against the estate of the deceased sole owner . . .
to the extent needed to pay . . . statutory allowances to the
surviving spouse." Iowa Code § 633D.8(1). Because
the investment holdings within the retirement accounts were
likely mutual funds or index funds, Rachel argued those
accounts should be considered "securities" within
the meaning of the statute.
Gantner daughters disputed that either an IRA or a SEP IRA
qualifies as a "security" under section 633D.8(1).
The daughters reasoned that the retirement accounts were not
securities simply because they contained securities. Meredith
and Paige also argued that the definition of
"security" within the Uniform Iowa Securities Act
specifically excludes any interest in a pension or welfare
plan subject to the Employee Retirement Income Security Act
of 1974 (ERISA). See id. §
502.102(28)(c)(1). On these grounds, the Gantner
daughters maintained that the accounts were unavailable to
pay any spousal support for Rachel.
written order, the probate court denied Rachel's
application for spousal allowance. Rather than focusing on
the meaning of the term "security" as used in
section 633D.8(1), the court concluded that the retirement
accounts were not available for spousal support purposes
because they were nonprobate assets. Relying on our decision
in In re Estate of Myers, 825 N.W.2d 1 (Iowa 2012),
the court determined that the proceeds from each retirement
account became the personal property of the Gantner daughters
at the time of Joseph's death because they had passed
outside the estate. The court further concluded that
"legislation would be required in order to make the
beneficiary accounts available to satisfy a spousal
appealed, and we retained the appeal.
II. Standard of Review.
for spousal support under Iowa Code section 633.374 is tried
in equity, and we review a court's ruling on an
application for spousal support for abuse of discretion.
See Iowa Code § 633.33; In re Estate of
Sieh, 745 N.W.2d 477, 479 (Iowa 2008). However,
"when there are no disputed facts and the appeal turns
on whether the probate court's interpretation of a
statute was erroneous, . . . our review is for corrections of
errors of law." Myers, 825 N.W.2d at 3-4.