B-153479, APR. 15, 1964

B-153479: Apr 15, 1964

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TO THE ATTORNEY GENERAL: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 3. WHICH AN INDIVIDUAL IS REQUESTED TO EXECUTE WHEN HE IS COMMITTED TO A PENAL OR CORRECTIONAL INSTITUTION. PAYMENT OF FUNDS THAT MAY BE DUE AN INMATE AT THE TIME OF HIS DEATH UNDER PRESENT PROCEDURES IS MADE ADMINISTRATIVELY. WHEN THERE IS NO DOUBTAS TO THE PROPER PERSON TO RECEIVE PAYMENT. WHILE THE LAWS OF DESCENT AND DISTRIBUTION ARE FOLLOWED. IT IS STATED THAT IN MANY INSTANCES THIS DISREGARDS THE INMATE'S WISHES. IN CASES WHERE THERE IS DOUBT AS TO THE AMOUNT. THEY ARE REFERRED TO OUR OFFICE FOR SETTLEMENT. WE HAVE BEEN ADVISED THAT THE PURPOSE OF THE PROPOSED REVISION OF RECORD FORM NO. 61 IS TO PROVIDE A SOUND LEGAL BASIS FOR DISTRIBUTING FUNDS REMAINING IN DECEASED INMATES' ACCOUNTS TO PERSONS DESIGNATED BY THE INMATES WITHOUT REGARD TO THE LAWS OF DESCENT AND DISTRIBUTION.

B-153479, APR. 15, 1964

TO THE ATTORNEY GENERAL:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 3, 1964, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT ATTORNEY GENERAL REGARDING THE PROPOSED REVISION OF DEPARTMENT OF JUSTICE RECORD FORM NO. 61, ENTITLED AUTHORIZATION FOR DISPOSITION OF MAIL AND PROPERTY.

RECORD FORM NO. 61 PRESENTLY IN USE, WHICH AN INDIVIDUAL IS REQUESTED TO EXECUTE WHEN HE IS COMMITTED TO A PENAL OR CORRECTIONAL INSTITUTION, AUTHORIZES THE WARDEN OR SUPERINTENDENT TO OPEN THE INMATE'S MAIL AND TO RECEIVE FUNDS FOR CREDIT TO THE INMATE'S ACCOUNT. ALSO, IT PROVIDES FOR THE DESIGNATION BY THE INMATE OF A PERSON TO RECEIVE ANY PERSONAL EFFECTS, INCLUDING ANY MONEY REMAINING TO HIS CREDIT IN, OR DUE HIM FROM THE PRISON OR INSTITUTION, IN THE EVENT OF THE INMATE'S DEATH.

THE ADMINISTRATIVE ASSISTANT ATTORNEY GENERAL STATES THAT CONSISTENT WITH REGULATIONS SET FORTH IN 4 GAO 3500, PAYMENT OF FUNDS THAT MAY BE DUE AN INMATE AT THE TIME OF HIS DEATH UNDER PRESENT PROCEDURES IS MADE ADMINISTRATIVELY, UP TO $100, WHEN THERE IS NO DOUBTAS TO THE PROPER PERSON TO RECEIVE PAYMENT. ALSO, WHILE THE LAWS OF DESCENT AND DISTRIBUTION ARE FOLLOWED, IT IS STATED THAT IN MANY INSTANCES THIS DISREGARDS THE INMATE'S WISHES. IN CASES WHERE THERE IS DOUBT AS TO THE AMOUNT, VALIDITY OF THE CLAIM, OR PERSONS PROPERLY ENTITLED TO PAYMENT, AND WHEN AMOUNTS DUE INMATES AT THE TIME OF DEATH EXCEED $100, THEY ARE REFERRED TO OUR OFFICE FOR SETTLEMENT.

WE HAVE BEEN ADVISED THAT THE PURPOSE OF THE PROPOSED REVISION OF RECORD FORM NO. 61 IS TO PROVIDE A SOUND LEGAL BASIS FOR DISTRIBUTING FUNDS REMAINING IN DECEASED INMATES' ACCOUNTS TO PERSONS DESIGNATED BY THE INMATES WITHOUT REGARD TO THE LAWS OF DESCENT AND DISTRIBUTION. ACCOMPLISH SUCH PURPOSE, IT IS PROPOSED TO REVISE RECORD FORM NO. 61 IN SUCH A MANNER THAT FUNDS REMAINING IN DECEASED INMATES' ACCOUNTS ARE HELD IN TRUST TO BE DISTRIBUTED TO PERSONS DESIGNATED BY THE INMATES UNDER A TRUSTEE RELATIONSHIP.

THE PROPOSED REVISION PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"I HEREBY APPOINT THE WARDEN/SUPERINTENDENT OF THIS INSTITUTION AS MY TRUSTEE TO HOLD FOR MY USE AND BENEFIT ALL MY PERSONAL PROPERTY IN HIS CHARGE AND ALL MONEY TO MY CREDIT IN THE PRISONERS' TRUST FUND.

"IN THE EVENT THAT I SHOULD DIE WHILE IN THE CUSTODY OF THE ATTORNEY GENERAL, I DIRECT THAT ALL OF MY PERSONAL EFFECTS, INCLUDING ANY MONEY REMAINING TO MY CREDIT IN THE PRISONERS' TRUST FUND, BE TRANSMITTED AND DELIVERED TO ---------------------------------------- WHOSE ADDRESS IS ---

STREET ------------------------------------------------------ -----------

CITY AND STATE

"I HEREBY APPOINT THE PERSON NAMED ABOVE, AS SUCCESSOR TRUSTEE TO THE ABOVE DESIGNATED WARDEN/SUPERINTENDENT OR HIS AUTHORIZED REPRESENTATIVE, FOR THE PURPOSE ONLY OF RECEIVING MY PERSONAL EFFECTS, INCLUDING ANY MONEY REMAINING TO MY CREDIT IN THE PRISONERS' TRUST FUND, AND DISPOSING OF SAME IN ACCORDANCE WITH THE LAWS APPLICABLE TO THE DISPOSITION OF MY ESTATE, RESERVING THE RIGHT AT ANY TIME DURING MY INCARCERATION TO CHANGE THE DESIGNATION OF SAID SUCCESSOR TRUSTEE.'

IN OUR DECISION OF AUGUST 26, 1933, A-44008, TO THE THEN ATTORNEY GENERAL, INVOLVING A CLAUSE SIMILAR TO THAT PRESENTLY SET FORTH IN RECORD FORM NO. 61 IN WHICH THE INMATE DESIGNATES A PERSON TO RECEIVE ANY PROPERTY OR FUNDS DUE HIM FROM THE PRISON OR INSTITUTION IN THE EVENT OF HIS DEATH, WE CONSIDERED WHETHER PAYMENT OF SUCH FUNDS TO THE PERSON SO DESIGNATED WOULD BE PROPER. WE HELD THAT IF AN INMATE DIES WITH MONEYS OWING TO HIM FROM THE UNITED STATES FOR SERVICES RENDERED BY HIM DURING HIS IMPRISONMENT, PAYMENT THEREOF MAY BE MADE ONLY TO A LEGAL REPRESENTATIVE OF THE INMATE'S ESTATE OR IN ACCORDANCE WITH THE LAWS OF DESCENT AND DISTRIBUTION OF THE STATE OF HIS DOMICILE AND THAT THE DISTRIBUTION OF THE EFFECTS AND PERSONAL FUNDS OF THE INMATES WAS A MATTER PRIMARILY FOR DETERMINATION BY THE ATTORNEY GENERAL.

UNDER THE ABOVE-QUOTED LANGUAGE, THE INMATE RETAINS BOTH THE RIGHT TO USE AND THE BENEFIT OF THE MONEY TO HIS CREDIT IN THE PRISONERS' TRUST FUND. ALTHOUGH THE ABOVE-QUOTED LANGUAGE PLACES NO RESTRICTIONS ON THE INMATE'S USE OF HIS MONEY, WE UNDERSTAND THAT THE PURPOSES FOR WHICH AN INMATE COULD MAKE WITHDRAWALS WOULD BE SUBJECT TO REGULATIONS OF THE BUREAU OF PRISONS. HOWEVER, IN VIEW OF THE INMATE'S RETENTION OF THE AFOREMENTIONED RIGHTS AND BENEFITS, IT APPEARS THAT THE INTEREST TRANSFERRED TO THE WARDEN IS LITTLE MORE THAN MERE POSSESSION OF THE INMATE'S MONEY WITH OWNERSHIP REMAINING IN THE INMATE WHICH IS MORE CHARACTERISTIC OF AN AGENCY OR BAILMENT. THEREFORE, IN THE PRESENT SITUATION, IT APPEARS DOUBTFUL THAT A VALID TRUST IS CREATED.

UNDER THE ABOVE-QUOTED LANGUAGE, UPON THE INMATE'S DEATH, THE WARDEN AS TRUSTEE IS TO DELIVER THE INMATE'S PERSONAL PROPERTY IN HIS CHARGE AND THE MONEY TO THE INMATE'S CREDIT IN THE PRISONERS' TRUST FUND TO A PERSON DESIGNATED BY THE INMATE AND APPOINTED BY THE INMATE AS A SUCCESSOR TRUSTEE. SUCH SUCCESSOR TRUSTEE IS TO DISTRIBUTE THE DESIGNATED PROPERTY IN ACCORDANCE WITH THE LAWS APPLICABLE TO THE DISPOSITION OF THE INMATE'S ESTATE. THE APPOINTMENT OF SUCH SUCCESSOR TRUSTEE IS IN EFFECT THE APPOINTMENT BY THE INMATE OF AN EXECUTOR TO DISTRIBUTE A PORTION OF HIS ESTATE IN A SPECIFIED MANNER WHICH IS TESTAMENTARY IN NATURE. AT THE TIME OF HIS DEATH, THE INMATE WILL HAVE CREATED NO INTEREST IN HIS DESIGNATED PROPERTY IN A BENEFICIARY OTHER THAN HIMSELF SINCE UNDER THE ABOVE-QUOTED LANGUAGE HE RETAINED THE BENEFIT OF SUCH PROPERTY. IT IS STATED IN SECTION 56 OF THE RESTATEMENT OF THE LAW OF TRUSTS, SECOND, AS FOLLOWS:

"WHERE NO INTEREST IN THE TRUST PROPERTY IS CREATED IN A BENEFICIARY OTHER THAN THE SETTLOR BEFORE THE DEATH OF THE SETTLOR, THE DISPOSITION IS TESTAMENTARY AND IS INVALID UNLESS THE REQUIREMENTS OF THE STATUTE OF WILLS ARE COMPLIED WITH.'

IT IS CLEAR THAT THE PROPOSED REVISION TO RECORD FORM NO. 61 LACKS THE CHARACTERISTICS AND FORMALITIES OF A WILL.

IN ADDITION, IT IS NOTED THAT IN SOME STATES THERE ARE STATUTES WHICH PROVIDE THAT A TRANSFER IN TRUST FOR THE BENEFIT OF THE SETTLOR IS VOID. SEE RESTATEMENT, SECOND, TRUSTS, SEC. 114 COMMENT C.

IN VIEW OF THE FOREGOING, WE DO NOT BELIEVE THAT THE PROPOSED REVISION OF RECORD FORM NO. 61 PROVIDES A SOUND LEGAL BASIS FOR DISTRIBUTING FUNDS REMAINING IN AN INMATE'S ACCOUNT TO A PERSON DESIGNATED BY THE INMATE UNDER A VALID TRUSTEE RELATIONSHIP. WHAT WAS STATED IN OFFICE DECISION OF AUGUST 26, 1933, A-44008, IS EQUALLY APPLICABLE TO THE INSTANT PROPOSAL. THEREFORE, WE ARE UNABLE TO APPROVE YOUR USE OF THE PROPOSED REVISION AS AUTHORITY TO PROCESS AMOUNTS REMAINING IN DECEASED INMATES' ACCOUNTS TO INDIVIDUALS DESIGNATED REGARDLESS OF DESCENT AND DISTRIBUTION REQUIREMENTS UNDER STANDARD FORM 1055 PROCEDURES.