Washington Law Review




The United States Supreme Court recently handed down a decision reversing the Washington Supreme Court which has important ramifications in all community property jurisdictions. The problem began when Angel N. Yiatchos purchased Series E United States savings bonds with community funds. Angel became registered owner of the bonds and his brother was designated P.O.D. (payable on death) beneficiary. After Angel's death, his widow refused to deliver the bonds to the brother. The brother then brought suit against the widow individually and as executrix to determine ownership of the bonds. Angel's widow sought one-half interest in the bonds as her community share and asked that the proceeds of the remaining bonds be distributed to the devisees named in decedent's will. On stipulated facts, the Supreme Court of Washington held that Angel's purchase with community funds of bonds payable to him alone, or to his brother upon his death, was in fraud of his wife's rights and was therefore void ab intio. On appeal, the United States Supreme Court reversed and remanded. Held: Because Treasury regulations have the force of federal law, the P.O.D. beneficiary of federal savings bonds is entitled to the bonds unless their purchase by a husband with community funds is a "fraud" upon the wife as determined by federal law, and the wife has an undivided one-half interest in the bonds as a community asset. Yiatchos v. Yiatchos, 376 U.S. 306 (1964).

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