Tales From The Mason Law Horror Files . . .
Once Upon A Time . . .
Margaret and Jim Anderson raised their three children, Princess, Bud and Kitten in the 1950’s and 1960’s in the Greystone area of Asheboro, North Carolina (a leafy post-WW II neighborhood of 3 and 4 bedroom homes). The three kids grew up. Bud moved to Charleston, and Kitten moved to Atlanta. Princess stayed on in Asheboro.
In 1995 Margaret suddenly died. Although Jim was bereaved, wedding bells rang in 2003 when he married Eloise Haskell, a widow from nearby Mayfield. Eloise had an only child, Eddie Haskell, who lived in Oregon. The Anderson kids had a difficult time with Eddie on the rare occasions they saw him (Eddie had a difficult time concealing his manipulative and greedy nature).
Eloise and Jim’s children maintained a friendly, but never-too-close, relationship. Things became a bit strained, especially between Eloise and Princess, when Eloise began to show some early signs of dementia in 2005 (some forgetfulness, a bit of paranoia . . . but nothing too alarming). Jim remained active and vigorous, continuing with volunteer work at a variety of charities. Then, in 2010, disaster: Jim suddenly died.
After the funeral, Princess found a copy of Jim’s old will naming Princess as executor. She made an appointment with Bob Mason and asked him “tell me what to do?”
Princess, We Have a Problem . . .
Jim’s 2004 will left a life estate in the Greystone house to Eloise and also left all household furnishings to Eloise (with the proviso that Eloise allow Jim’s kids to have whatever). The will left the rest of Jim’s estate to his children.
After some research Bob discovered that in 2005 Jim deeded a tenancy by the entireties interest in the Greystone home to Eloise (a type of estate in land in which spouses own the land together and in which the surviving spouse takes the entire interest upon the death of the first spouse to die).
Bob also noted from documents dropped off by Princess that Jim’s Acme Investment Advisors mutual fund was titled in his and Eloise’ name.
After Princess qualified as Executor, Bob discovered that two other bank accounts were jointly titled with Eloise and that she had been beneficiary of Jim’s IRA since 2005.
At a followup meeting, Bob delivered the bad news.
“Let’s Get Bud and Kitten on a Conference Call”
In an Anderson family meeting (Bud and Kitten called in, Princess spent most of the time with the tissue box in the conference room), Bob explained that the Greystone home they were raised in became Eloise’s home (outright, to do with as she pleased, and not “just a life estate”) upon Jim’s death by virtue of the 2005 tenancy by the entireties deed. The will didn’t really matter.
Bob also explained that the jointly owned accounts were now owned by Eloise, and that as IRA beneficiary she was entitled to that account. Again, the will didn’t matter.
Bud and Princess both agreed that Eloise’s son, Eddie Haskell, “had a lot of lawyer friends.” They said that Eddie had been extremely ingratiating to Jim for years and “he probably talked Jim into setting up everything that way.” Bob explained that it would be very difficult to prove undue influence or fraud many years after Jim had retitled the house and the accounts . . . especially when Jim had been so active (and obviously in command of his mental faculties) up until his death.
To Add Insult to Injury . . .
Princess called Eloise and attempted (very politely) to ask if Princess could have some of the furniture, silver and china that had been her parents. Eloise grew vague and mumbled something about “thinking about it.”
When Princess called back a few weeks later Eloise exploded and demanded that Princess leave her alone and that if she kept pestering her she would have Eddie contact a lawyer.
What Should Have Been Done?
You tell me! A copy of the 9 1/2 hour DVD set “Elder Law University” ($149 value) will be given to the best response in the comment section below. The August 1 issue of Elder Law Update (and an accompanying post here) will discuss a few of my recommendations . . . and, of course, announce a winner
So . . . post away!
PS: IF YOU ARE ONE OF MY LAWYER READERS NO YOU CAN’T PARTICIPATE!!
AND NOW . . . HEH, HEH, HEH . . . THE ANSWER
Two weeks later and here we are.
Of course, the correct answer was Don James’ (below): He should have hired ME! But since he didn’t . . .
Billie Hansen, Kelly Anderson, and Celeste Spence all mentioned a wonderful idea . . . . COMMUNICATION! What a novel idea! True, people procrastinate, but marriages at any age are a major milestone. Out of a love and kindness to both families there should have been some frank discussions ahead of time.
The problem often is that no matter how well planned a will may be, they are relatively easy to change. A properly drafted prenuptial agreement can create enforceable rights in later heirs if the parties to the prenuptial agreement specify and agree that they will maintain valid wills that make the desired dispositions to various family members. Even if they later change their wills or titles to real property there may be a cause of action available to the heirs. Prenuptial agreements do nothing, however, to protect assets if this older couple is concerned about protecting assets in the event the new bride or groom ends up in a nursing home. Medicaid counts the assets of both members of a married couple, and North Carolina has something called the “Doctrine of Necessaries.” Under that old doctrine, each of a husband and wife are legally obligated for the other’s medical care regardless of any agreement they may have had between each other (this doesn’t apply if one is on Medicaid). In those cases a “prenup” wouldn’t have mattered, although a prenup is good to establish other understandings.
If the house was the major concern (as is often the case) Jim could have established either a revocable or irrevocable trust and titled the house in the name of the trust. He could have named Bud or Princess as the trustee (or perhaps even co-Trustee with Jim). The trust could have specified that Eloise would have a life estate in the home upon Jim’s death. It could have also specified that at any time after the establishment of the trust the house could not be taken out of trust without the written agreement of all trustees (that would have prevented Jim from later adding Eloise’s name to a tenancy by the entireties title).
There really is no ONE correct answer other than Jim and Eloise, out of love for their children, should have opened up the communications channels and been willing to seek some guidance.
This was a sad story.
Don James is a CPA and hangs out with too many lawyers! (Sorry, Don) I couldn’t decide between Billie, Kelly and Celeste . . . so I’ll send each one an Elder Law University DVD set. Ladies, please send your mailing address to Stacey Kinney at: sck (at) masonlawpc.com (replace the “(at)” with an “@” and close up the spaces!
For more reading on second marriage issues go see Tying the Knot . . . Or Just Moving In?
Gail Moore says
This is not right, Mr Anderson was put under a lot of presure to have done this. The new wife and her son took advantage of him. There should be some way to break the will. He only new her a short while and her son living out of state was taking advantage. I know he loved his children and he would not have left them out of the will. Shame on this woman and her son. They should be ashamed to show their face in public. 99 percent of Elder Abuse and scams are done by family members according to s
Social Services Statics.
Bob Mason says
Gail: You’re correct, the whole situation is outrageous. However, the will wasn’t the problem. The biggest problems were the deed and the IRA beneficiary designation he executed 5 years before he died. As noted, he appeared to be very active and competent up until he died. Trying to prove some sort of fraud or undue influence 5 years before he died would be very, very difficult (technically) although our collective emotional response is “this just can’t be!” And you are also right, most scams are committed by family and caregivers.
Giles Almond says
Bob, it’s imperative that adult children have The Talk with their parents, especially in a case like this. The Talk is a discussion of the basic facts of the parents’ estate plan. What gives a child the moral right or prerogative to bring this up? It begins with the child’s estate plan. When the child goes to the attorney to have his/her documents drafted and executed, it gives the child the perfect entre to have a discussion with the parents. “Mom and Dad, we just went to our attorney to have our estate planning documents drafted and we learned how important it is to have a good estate plan in place. Our estate plan basically works like this… If, God forbid, something happens to you, is there anything you would want us to know about your estate plan?” Hopefully, that would lead to a meaningful and productive conversation.
Bob Mason says
Whole heartedly agree, Giles! Good point.
Blanche T. Moreover says
I have a suggestion…….but, no. That’s probably not legal (yet).
Bob Mason says
AH-HAHAHA! Probably the same reaction my brother-in-law sent me off-list. If it is the same, then you are correct . . . it isn’t legal. Plus . . . not very effective. If Eloise “suddenly died” everything would pass to the despised Eddie Haskell.
The loss of a spouse, especially at an older age and especially for men is a very difficult time. Loneliness for men is more of an issue and they are likely to remarry at some point. It can also trigger loss of mental ability or dementia.
It would have been a good time after he had time to greive, for the children to have the conversation with dad about what mom would have wanted for the children, related to estate planning. This is a critical time to deal with it, before dad gets bitten by the love bug, which can cause mental disorientation as well:).
On the other hand, what can be done if the dad will not discuss this or even consider the possibility of his mental decline?
Could dad have ownership for all his assets modified to become part of his estate upon death so that his will would define the disposition of his estate. But what’s to keep dad from changing these asset directives without the childrens knowledge at any time? Is there any legal instrument requiring notification of the children or potential heirs of any changes made?
Having both parents with demential, i know that they continue to function a long time without the demential being apparent. Looking back, i can recall signs of it, but I can tell you for sure, my dad would never have admitted it or done anything legal to prevent him from making bad decisions. So, in the end, I am not sure if anything can be done to prevent the situation of this story.
First of all, it would have been ideal if Jim and Eloise had executed a pre-nuptial agreement so there would be no surprises at the demise of the first spouse and the wishes of both could have been carried out. Had Eloise died first, these problems would not exist because Jim would have retained ownership of the property and all the accounts. Apparently the lines of communication between Jim and his children, especially about the topic of estates, had not been kept open.
The home/property should have been left as it was, giving Eloise a life estate in the Greystone house, then reverting to Jim’s estate.
Ideally, Jim and Eloise could have talked with his children about specific pieces of furniture, china, silver, etc., that they would ultimately care to own, making a written list or tagging the pieces appropriately. This would have eliminated any questions at Jim’s demise.
The two bank accounts and mutual funds could have been placed in a trust rather than adding Eloise’s name to the accounts, perhaps naming Jim and Eloise AND one or more of Jim’s children as co-trustees, giving Eloise an adequate portion of the earnings for her living expenses, as well as giving the trustees the right to invade the principal in the event of her need. By doing that, there would have been full accountability for the funds by both Eloise and the children so that she was taken care of adequately (assuming that would have been Jim’s wish) and the balance would have been left to the children as Jim intended. He may even have chosen to include Eddie Haskell in the distribution to some extent.
The IRA could have named Jim’s estate as the beneficiary.
Celeste Spence says
Maybe at their age they never should have married. Just enjoy being together, and what’s his is his, and what’s hers is hers. But, that not being the case, immediately upon seeing that Dad was “dating,” the children should have called a family meeting with Dad to review his Will and ask that he include them in any decision-making with regard to changing that Will in the future. If my mother started dating after the death of my father a few years ago, my red flags would be flying all over the place! You just can’t trust anybody these days. The moral of the story . . . get it in writing, but get it right.
Bob Mason says
Good idea about family meeting . . . see Don James answer below. Full and fair disclosure . . . Celeste was a great administrative assistant I worked with about 12 or 13 years ago . . . then she became an entrepreneur and a friend. Have you become a 1%-er yet?
Celeste Spence says
P.S. I love the picture of Eloise!
Bob Mason says
Actually, I was more partial to Princess.
Don James says
What should have been done?
Jim Anderson should have engaged Bob Mason as his attorney and estate planner, then, none of this mess would have occurred. Bob would have ensured that the desires of Mr. Anderson, via his will, would have been achieved. Bob would have encouraged and insisted that Mr. Anderson periodicall review his will and any contracts which he may have signed.
Keep it simple. Mr. Anderson had a will in which he allowed his spouse the use of his house for the remaider of her life. It was his desire that the house then be distributed to his 3 children via his will. The contract, tenancy by the entireties, should not have been executed.
As for the bank accounts and the investment account, Mr. Anderson should not have them titled in his and Eloise’s name. He should have named his 3 children as beneficiaries. Same for the IRA, he should not have made Eloise his beneficiary. Unfortunatly for the 3 children, contract law trumps the will.
Another alternative would have been to establish a Family Limited Trust. Then with proper re-titling of the owneship and beneficiaries, Mr. Anderson’s estate would have gone to his 3 wonderful children.
If we assume that Mr. Anderson did in fact want Eloise to “have everything” then he should have had a meeting with his children and explained it to them. No communication, led to major mis-understanding. But, he probably did not understand that after “everything” went to Eloise, it then goes to Eddie.
Bottom line – we each need to have a full understanding of our wills, contracts and how they interact and affect each other and our beneficiaries. An attorney, competent in estate law, is necessary.
Bob Mason says
On the basis of the first paragraph this is probably the WINNER! Just kidding . . . we’ll see what pops up over the next few days. Great response.
Kelly Anderson says
Assuming Jim’s 2004 will reflected his actual wishes, we have to assume that Eloise had some money of her own, as he was not concerned about leaving her money and instead only left her the house for her use during her lifetime (plus the furnishings). If this is indeed what he wanted, then he should have done a new will that 1) gave Eloise a life estate in the house, 2)left the furnishings to Eloise but included a list that specified items from the house that would go to the kids (which could be updated from time to time as the kids indicated what they wanted from 2005 to 2010), 3) itemized the bank accounts and the fact that they were to go to the kids, and 4) left the residual to the kids. In conjunction with this, he needed to a) keep the house deeded solely in his name, b)named the kids as beneficiaries of the IRA (which would bypass the estate), c) titled the mutual fund and bank accounts in his name alone. Presumably in this case, he would give Eloise money for household expenses from time to time (while he was alive). Or, perhaps one of the bank accounts would be used exclusively for household expenses, and could be jointly titled, but not maintain a significant balance which would make this account irrelevant for estate planning purposes.
If we assume, however, that Jim actually wanted to leave Eloise some money to live on during her lifetime (in addition to the house and the furnishings that the kids didn’t want), then Jim’s will and how he titles the accounts really depends on the size of those accounts and the size of the IRA. If smallish, he could have done the same as I suggested above with the will and the house, but jointly titled whichever accounts he wanted her to have, and named her as the beneficiary on the IRA presuming he wanted her to have that money as well.
If the account balances and IRA are large (ie larger than needed to sustain Eloise during her lifetime), and he wanted to ensure that any residual went to his kids instead of to Eddie, then he could instead revise his will to create a trust upon his death. Everything would go into this trust that named Eloise as the beneficiary during her lifetime (and presumably Princess as the Trustee), but upon Eloise’s death, the trust would dissolve and the assets go to the kids. In this case, the will would still include the list of furnishings for the kids, and the IRA could name either the kids or the trust, depending on whether those funds were needed in the trust for the purpose of supporting Eloise.
Bob Mason says
Great reply, Kelly! Definitely in the running for the Grand Prize! Wait . . . did Kelly Lanier help you with this!?
kelly lanier says
No! Wish I could take some credit for that one – it was good.
Kelly Anderson says
LOL. No, no help from Kelly Lanier. Just too much life experience!
Billie Hansen says
The all too unfortunate truth is that we as children sometimes do not have any control over the choices or actions made by our parents. Explaining the potential pitfalls that could be encountered when parents refuse to take responsibility for their legal actions (or inactions), can fall on deaf ears. This doesn’t mean your parents aren’t loving, or that they don’t wish the best for you after their demise, it can be just the natural (albeit irrational) fear that can come with age, (sometimes justifiably).
Having a frank legal talk is a marvelous idea if the parents are receptive, but all too often the talk comes woefully late in life after rational thinking is long past. We’re all procrastinators in one way or another, which for me is the moral of this story. It appears Jim’s kids had little interaction with their father after their mother’s death of a substantiative nature; therefore decisions and actions were taken without their knowledge, and we see the results. I tried numerous times in the years before my father’s death and my mother’s descent into Alzheimer’s disease to have “the talk” with my parents; to no avail. It was not that they didn’t care for us as children and know what, and how, their estate was to be distributed, they were just unfortunately past the point of understanding.
Therefore the answer for me lies in taking care of my own estate planning now rather than later, so that (hopefully!) issues such as these won’t transpire!
Lisa Reeves says
My Dad of 80 years old married a woman now 62 over 15 years ago. My great aunt gave my dad property and the greedy stepmom, had her name put on the deed. There was another property that the same great aunt purchased and gave my dad and greedy wife did the same thing. I can’t prove the latter property was in our family because it was not. The first property has been in our family since the 1920s. Dad finding all this out has his other properties put solely in my name. More family property. My question is they live on the property he put in my name and if he passes can I make her move? She has already acquired two properties that she is not entitled to. I would like to get the family owned property from her. The one I can prove belongs to my family. Plus she had my great aunt SIGN a personal check that she wrote to herself for $60000.00. This was a week before my great aunt died. This woman has her granddaughter living on a property that is in my name paying zero to live there. She has her mother living in the house with them. He is surrounded by her family. My only sister was killed I. A car wreck. Her son, dads only grandchild was also killed playing with an antique gun. We as a family have suffered great losses and to think this greedy woman moved her family all on my dads property which is in my name. I want her out of this family with the smallest amount of anything. Can I make her move? Can I get the family property back that was given to my dad, but she had her name placed on the deed? Can I take anything from her that would have been my sisters or nephews? She is extremely greedy and I know it will get ugly if I survive my 80 year old dad.
bob mason says
I can’t give this sort of legal advice in response to an online inquiry. You definitely need an attorney who is a litigator (I’m not your guy). Let me know where you are and I might be able to make a referral).