## Facts

- Sylvester L. Lahren placed the bulk of his assets in four bank certificates of deposit (CDs) at American Bank (formerly First Security Bank).
- One CD listed the depositors as “S.L. or Signe Lahren,” naming Sylvester and his granddaughter, Signe Lahren.
- Three CDs listed the depositor as “S.L. Lahren P.O.D. Signe Lahren,” where “P.O.D.” meant “payable on death” to Signe as beneficiary.
- Sylvester executed a will making specific gifts of personal property and leaving the residuary estate to three of his four sons.
- Sylvester died testate on June 25, 1992, and Signe served as personal representative.
- After Sylvester’s death, Signe sought an order declaring that the three P.O.D. CDs were not part of the probate estate and that the proceeds belonged to her.
- The sons (residuary beneficiaries) opposed Signe’s claim and contended the CDs should be treated as estate assets distributed under the will.
- Each CD form contained pre-printed language stating that if more than one person was named as depositor, the certificate would be owned as “joint tenants with right of survivorship,” but the three disputed CDs listed only one depositor (S.L. Lahren) with a P.O.D. beneficiary designation.
- The District Court ruled that (1) the three P.O.D. CDs were held in joint tenancy with right of survivorship between Sylvester and Signe, and (2) the P.O.D. designations operated to transfer the CD proceeds to Signe outside probate as valid nontestamentary transfers.
- The sons appealed to the Montana Supreme Court.

## Issues

1. Did the District Court err in determining that CDs naming one depositor and one “P.O.D.” beneficiary created a joint tenancy between the depositor and the beneficiary?
2. Did the District Court err in determining that the P.O.D. designations transferred the CD proceeds to the beneficiary outside the probate estate at the depositor’s death as a nontestamentary transfer?

## Decision

- The Montana Supreme Court reversed the District Court’s ruling that the three “S.L. Lahren P.O.D. Signe Lahren” CDs were joint tenancy instruments.
- The Court affirmed the District Court’s ruling that the P.O.D. designations were valid nontestamentary transfers and that the CD proceeds passed to Signe outside the probate estate upon Sylvester’s death.
- Disposition: affirmed in part and reversed in part.

## Legal Principles

- A joint tenancy (joint interest) in Montana requires an express and unambiguous declaration in the instrument creating the interest; otherwise, the interest is treated as a tenancy in common under Montana law.
- A P.O.D. designation is not the same as a joint tenancy designation because a P.O.D. beneficiary has no present ownership interest during the depositor’s lifetime.
- Contract construction rules apply to resolve conflict between form boilerplate and specific written terms; written terms on an instrument control over pre-printed language when inconsistent.
- A P.O.D. beneficiary designation on a deposit agreement can be a valid nontestamentary transfer under Montana’s probate code provisions governing nonprobate transfers.
- Because a P.O.D. transfer is nontestamentary, it is not subject to will-execution formalities and does not pass through probate; the proceeds pass to the named beneficiary at the depositor’s death.

## Conclusion

The Montana Supreme Court held that the three CDs labeled “S.L. Lahren P.O.D. Signe Lahren” did not create joint tenancy because the P.O.D. wording granted Signe no present ownership interest and lacked the express declaration required for joint tenancy, but it did validly direct that the CD proceeds pass to Signe at Sylvester’s death outside the probate estate as a nontestamentary, nonprobate transfer.


In re Estate of Lahren, 886 P.2d 412 (1994)