## Facts

- Fred N. Kirkes and Gail J. Kirkes were married in Arizona.
- During the marriage, Fred opened an IRA in his name and funded it with community funds; the IRA was community property.
- Fred initially designated Gail as the sole IRA beneficiary, then changed the designation to give Joshua C. Kirkes (his son from a prior marriage) 83% and Gail 17%.
- Fred’s will left the remainder of his probate estate to Gail as sole devisee.
- After Fred’s death, Gail petitioned in probate to invalidate or limit the IRA beneficiary designation, contending she was entitled to one-half of the IRA as her community share.
- The superior court granted partial summary judgment for Gail, ruling she was entitled to half of the IRA, and entered judgment under Rule 54(b).
- Joshua appealed.

## Issues

1. Whether a deceased spouse may designate a non-spouse beneficiary to receive more than one-half of a community-owned IRA, so long as the surviving spouse ultimately receives at least one-half of the total community estate by value.
2. Whether community property at death should be analyzed under an “item” approach (half of each asset) or an “aggregate” approach (half of the community estate’s total value) for non-probate transfers such as IRAs.

## Decision

- The Court of Appeals reversed the partial summary judgment for Gail and remanded.
- The court rejected the superior court’s ruling that Gail was entitled, as a matter of law, to one-half of the IRA itself.
- The court held that an aggregate approach applies: a spouse may direct more than one-half of a particular community asset to a third party if the surviving spouse receives at least one-half of the community estate’s total value.
- Because the record did not establish whether Gail would receive at least half of the community’s total value considering all assets (probate and non-probate), summary judgment was improper.

## Legal Principles

- Each spouse holds an undivided one-half interest in community property, but the surviving spouse’s protected interest at death is measured in overall value, not necessarily in each specific asset.
- For non-probate beneficiary designations funded with community property (including IRAs), Arizona applies an aggregate method: the decedent may allocate disposition across assets, provided the survivor’s total community share equals at least one-half in value.
- Courts may evaluate the disposition of community-funded non-probate assets by analogy to community-funded life insurance beneficiary designations, which are permitted if the survivor’s total community share is preserved.
- If an aggregate review shows the surviving spouse receives less than one-half of the community’s total value, the remedy may involve adjusting other assets rather than automatically reducing the third party’s interest in the designated non-probate asset.

## Conclusion

The court held that a decedent may leave more than half of a community-funded IRA to a non-spouse beneficiary if the surviving spouse receives at least half of the total community estate by value, and it remanded for an aggregate valuation and allocation of the community estate.


In re Estate of Kirkes, 229 Ariz. 212, 273 P.3d 664 (Ariz. Ct. App. 2012)