On January 27, 2023, the Supreme Court of Iowa issued an opinion in the matter of Richard Grout as Trustee of the Helen Schardein 2018 Revocable Trust v. Dan R. Sickels (No. 21-0556). In the Spring of 2014, Helen Schardein, who was in her nineties, purchased a lake lot at Sun Valley Lake for $85,000.00 and titled it in joint tenancy with right of survivorship, with Dan R. Sickels, who provided various services to her. Helen had worked as a real estate broker and abstractor. Dan met Helen in 2012, and performed work on Helen’s rental properties and assisted her with her shopping and errands for no charge.
Dan testified that the lake lot was placed in joint tenancy by Helen to compensate him for the work he was doing for her. Helen paid for the real estate taxes, association dues, utilities and mowing on the lake lot. Helen and Dan paid for the insurance on the lake lot.
Helen retained her mental acuity until she suffered a stroke in October of 2018. On November 13, 2018, Helen directed another person to sign on her behalf, a general power of attorney naming her nephew, Richard Grout, as her agent. She also directed another person to sign on her behalf the Helen Schardein 2018 Revocable Trust. The contents of the documents were read to Helen before she directed another person to sign on her behalf. Richard and his sister received 35% of the trust, 35% went to her late husband’s nephews and nieces, 20% went to charitable entities and 10% went to other individuals. The lake lot was listed in the Trust as property of the Trust. Richard, using the power of attorney conveyed by a Warranty Deed, all of Helen’s undivided interest in the lake lot to the Trust. Helen passed away on March 30, 2019.
On May 20, 2020, Richard filed to partition the lake lot and requested that all of the net proceeds be paid to the Trust, given that Helen had provided all of the funds for the purchase.
The District Court found the transfer to the Trust severed the joint tenancy, and that the Trust was entitled to all of the net proceeds.
On appeal, the Court of Appeals affirmed the District Court’s ruling.
The Supreme Court agreed that the transfer to the Trust severed the joint tenancy. The Court used an intent-based test concluding that the intent must be derived from “an instrument effectuating the intent to sever the joint tenancy.” The Supreme Court found that the lower courts erred on how the proceeds should be divided. The Court concluded that where a two-party joint tenancy with rights of survivorship is created, there is a presumption that each party own a one-half proportional interest in the property. The Court did not find any evidence to rebut the presumption. The Court went on to find that after an equal division of the proceeds, there is a potential adjustment for value-enhancing contributions by the parties during the joint tenancy. The Court found that Helen paid six years of association dues and property taxes in the amount of $9,756.00 and awarded the Trust $41,534.27 ($31,778.27 plus $9,756.00) and Dan $31,778.27.