Dear Moneyist,
My father passed in 2001. He
married his wife in 1971 when I was 14. I have two blood siblings, and
my step-mother had one daughter; they are very close. My stepmother is
now 91 and in failing health. My wife and I traveled 1,000 miles to stay
with her during her recovery from pneumonia, and chronic obstructive
pulmonary disease last week. We have always gotten along well together
and, over the years, my siblings have been very nice to her.
‘I realized I was looking at the looting of my dad’s
estate—and all the money had been drained by my step-sister and her
husband.’
Before my dad
passed, we had a frank and clear discussion about his estate. He had
worked and invested and had more than $1 million in his estate, which he
clearly stated to me was to be split four equal ways upon the death of
his wife. She was also provided for by his company’s life insurance
policy, and the $600,000 from the sale of his Southern California home.
During our visit, she offered to have us stay in her home. I was going
through the old picture albums, and taking some cell phone camera shots
of my kids. There weren’t a lot, mostly of her daughter.
One of the picture albums had financial documents in it, and I soon
realized I was looking at the looting of my dad’s estate—and all the
money had been drained by my step-sister and her husband.
I’d
like to say I was shocked, but really it was almost a validation. My
stepsister’s husband has been on disability for 18 years. Each year,
their whole family of 6 takes at least 2 cruises. They drive new cars,
and there was plenty of money for my stepsister to buy a business for
her son.
I didn’t see the will when my dad died, but somehow he left it so
that in certain circumstance, if his wife’s income fell to a certain
level, they were able to access my dad’s estate principle. In 2009, my
stepsister and her husband took out a $750,000 single-premium life
insurance on my stepmom.
They borrowed $617,000 from my father’s
life insurance policy, and the surrender value and death benefit are now
about $120,000. They also wrote my stepmom’s trust and so that my
stepsister gets 75% of any distribution, and the other three kids share
equally of the remaining 25%.
My stepmom brought very little in assets into the marriage—just a
small home in California, which wasn’t worth much. She had no other
major assets. The life insurance policy was paid in full at the time of
issue, and the money had to come from my father’s estate. Even if we
fight it now, the money has been gone for 9 years, and now that stepmom
is in poor health we can see that, from our expected $250,000
distribution from dad’s estate, the blood issue kids will be very lucky
to get even $5,000 after probate and taxes.
I am lucky that I’ve
worked hard and invested well that it won’t be a problem for my wife and
I. My brother is on a pension from the state of California and is OK,
but my sister and husband are going to be hit hard by this. She has been
counting on that estate for 20 years to fund her own retirement, and
it’s not going to be there.
A word of warning to your readers: Don’t trust anyone. I’m going to
get a lawyer, and fight it for the hell of it, but even after I win a
judgment, the money has been spent, and we’ll never get anything out of
it. Any other suggestions?
Distraught
Dear Distraught,
These stepsiblings are absolutely attempting to cheat you out of your inheritance.
If
your father did not leave a will, the probate court should have divided
the estate in accordance with the law in the state of California. If
you father died intestate (without a will) in California, community
property goes to the surviving spouse, receives one-third of the total
separate property if there’s more than one child with the rest divided
among the children. Gather any documents you can on your stepfamily’s
financial transactions as evidence, obtained legally. But it may be too
late.
There is a statute of limitations on an oral promise in
California. “The applicable statute of limitations for filing a lawsuit
to enforce an oral promise to make a will or trust is one year from the
date of death of the person,”
according to Sweeney Probate Law, which has offices across the state. Anyone contesting a will has 120 days after it has been admitted to probate.
You
may have better luck with the statute of limitations in relation to
fraud. You must file a lawsuit within three years of discovering the
fraud or three years “
within reasonable diligence”
where you could have discovered those facts. The latter sounds like a
more moveable date that is open to challenge. Your lawyer will best
advice you on your options.
Your stepmother may or may not have been an accomplice to these
transactions. What is clear: Your stepsiblings saw an opportunity to
transfer this wealth. Obtain a copy of all life insurance policies,
compile a timeline of events. You may have a case for breach of contract
of the life insurance policy and/or elder abuse (if your stepsiblings
carried out these shenanigans while your stepmother was mentally
impaired) and even fraudulent wire transfer.
If you have an
experienced probate attorney, he/she may have another solution relating
to fraud. But you may be out of luck. You were correct not to rely on
your stepmother and her family to honor your father’s wishes, but the
statute of limitations and trying to find money after it’s been drained
from multiple accounts present dual challenges for you. If nothing else,
it serves as a timely warning to leave nothing to chance.
Full Article & Source:
While visiting my dying stepmother, I discovered her children had looted my father’s estate
