## Facts

- David Scheiner purchased United States Treasury bills registered in the joint names of himself and his sister.
- Scheiner purchased the Treasury bills before he married the woman who later became his surviving spouse.
- After Scheiner’s purchase, the United States Treasury adopted regulations treating Treasury bills, for transfer and ownership purposes, like United States savings bonds.
- Those federal regulations provided that, on the death of one co-owner, the surviving co-owner is recognized as the sole owner of the security.
- After Scheiner died, his surviving spouse filed a New York notice of election and sought to have the Treasury bills counted in the estate for purposes of calculating her elective share under EPTL 5-1.1 (as then in effect).
- Scheiner’s sister asserted that, under the federal regulations and the joint registration, the Treasury bills passed to her by survivorship and were not part of the elective-share calculation.

## Issues

1. Whether a surviving spouse may include jointly registered United States Treasury bills in the elective-share base under EPTL 5-1.1 when federal Treasury regulations provide survivorship ownership to the co-owner.
2. Whether New York may treat the decedent’s interest in such Treasury bills as a testamentary substitute for elective-share purposes, despite the federal survivorship rules.
3. Whether the federal regulatory scheme governing ownership and transfer of Treasury obligations displaces conflicting state elective-share rules.

## Decision

- The court ruled against the surviving spouse’s attempt to bring the jointly registered Treasury bills into the elective-share computation.
- The court treated the Treasury regulations as controlling the ownership consequences of joint registration, so the sister became the sole owner upon the decedent’s death.
- Because federal law dictated that result, the Treasury bills were not available to be recaptured through New York’s elective-share provisions.

## Legal Principles

- Federal Treasury regulations governing registration, ownership, and survivorship of Treasury obligations control the ownership consequences at death for those instruments.
- When federal regulations provide that a surviving co-owner becomes sole owner of a jointly registered Treasury security, the decedent’s interest is terminated at death by operation of federal law.
- A state elective-share statute may not be applied in a way that conflicts with federal rules governing transfer and survivorship incidents of federal obligations.

## Conclusion

*Matter of Scheiner* held that jointly registered U.S. Treasury bills passed to the surviving co-owner under federal Treasury regulations that treated such bills like savings bonds, and New York’s elective-share statute could not be applied to include those securities in the surviving spouse’s elective-share calculation.


Matter of Scheiner, 535 N.Y.S.2d 920 (1988)