## Facts

- Jack M. Murray executed a will on December 19, 2006, leaving his estate to family members or to trusts for their benefit.
- Attorney William E. Spiegle III prepared (or assisted in preparing) Murray’s will.
- Less than two months later, on February 2, 2007, Murray opened a bank account that included a pay-on-death (POD) beneficiary designation.
- Murray intended to name a trust as the POD beneficiary but did not have the trust documents available at the bank and was dissuaded from using the trust without those documents.
- Murray instead designated “William Spiegle Atty” as the POD beneficiary.
- Spiegle was unaware the account had been opened and had no knowledge of the POD designation during Murray’s life.
- Murray and Spiegle had no relationship beyond attorney-client; there was no evidence of a personal or familial bond.
- Murray died on December 19, 2007; the account was worth $143,151.26, roughly one-third of Murray’s total estate.
- Dan Stephenson, as personal representative (executor) of Murray’s estate, learned of the account while gathering estate assets and disputed Spiegle’s claim to the funds.
- In subsequent communications, Spiegle asserted he was the account’s beneficiary but also indicated he did not know why the account existed or why he was named.

## Issues

1. Whether a court of equity may rescind a POD beneficiary designation based on the decedent’s unilateral mistake when the designation appears inconsistent with the decedent’s testamentary plan.
2. Whether rescission requires proof of inequitable conduct by the named beneficiary, or whether unconscionable enforcement alone can justify equitable relief.

## Decision

- The Appellate Division affirmed the Chancery Division’s judgment for the estate.
- The court upheld the finding that Murray’s naming of Spiegle as POD beneficiary was best explained as a mistake tied to Murray’s effort to place the funds into a trust-based estate plan.
- The court held that equity permitted rescission of the POD designation and directed that the account funds be treated as estate property for distribution under Murray’s will.
- The court rejected the argument that rescission was unavailable absent wrongdoing by Spiegle, concluding that enforcement could be denied when it would be unconscionable even if the beneficiary acted innocently.

## Legal Principles

- A payable-on-death designation, though a nonprobate transfer, may be set aside in equity when the evidence shows it does not reflect the account owner’s intended disposition.
- Rescission may be an appropriate remedy for a unilateral mistake of substantial consequence when enforcing the designation would be unconscionable.
- Equitable rescission for unilateral mistake does not necessarily require inequitable conduct by the non-mistaken party.
- In determining intent and mistake, a court may rely on circumstantial proof, including the decedent’s recent will, the absence of any close relationship supporting a large transfer, and the surrounding circumstances when the beneficiary designation was made.
- Appellate review gives substantial deference to a trial judge’s factual findings and credibility determinations when supported by sufficient credible evidence in the record.

## Conclusion

The Appellate Division affirmed rescission of a POD designation naming the decedent’s will-drafting attorney as beneficiary, holding that the designation resulted from the decedent’s unilateral mistake and that equity could prevent an unconscionable result by awarding the account funds to the estate for distribution under the will, even without misconduct by the attorney.


Stephenson v. Spiegle, 58 A.3d 1228 (2013)