Dear Len & Rosie,
My father died recently and the court made me the executor of his estate. I am the last survivor of his four children. My mother died many years ago. I thought I would inherit the entire estate, after Dad’s credit cards were paid off.
Unfortunately, on one investment Dad had a pay-on-death clause that says it’s supposed to go to some woman I’ve never heard of! Dad liked the ladies, especially the loose ones. I want to keep this floozy from getting Dad’s money, but the lawyer says the pay-on-death clause precludes probate, so there’s nothing I can do. He could not explain to me why, but is he right?
Your lawyer is correct. It is not uncommon for bonds, insurance policies, pension plans, and bank accounts to have pay-on-death beneficiaries. Pay-on-death accounts are similar to assets held in joint tenancy, life estates, and trusts, in that none of these assets are subject to probate. Because the pay-on-death account is not in your father’s probate estate, you, as executor, have no jurisdiction over that account.
At the moment of your father’s death, the pay-on-death account automatically became the property of your father’s friend. All she has to do is to have the financial institution retitle the account in her name. She can do it herself by of presenting a certified original death certificate to the financial institution and requesting the transfer.
If, however, the asset is stock in a corporation, a mutual fund or brokerage account, it is a little bit more complicated, because corporation stock transfer agents require letters of instruction, signature guarantees, and affidavits of domicile, before they will retitle assets. If your father’s pay-on-death investment is one of those, then his friend should ask an attorney or broker for help.
Of course, that’s her problem, not yours.
There are provisions in the law for the executor to pull such non-estate property into a probate estate, but you would have to prove that the pay-on-death designation resulted from the friend’s wrongdoing, such as fraud or undue influence.
Hopefully your lawyer explored that possibility. But it’s a long shot at best. To prove undue influence you have to show that the girlfriend so manipulated your father as to destroy his free will and bend him to her influence. If she managed to pull that off, then why did she stop at just one investment?
It is more likely that your father added the pay-on-death designation because he wanted his friend to get that one asset when he died. Just because you feel this is unfair is not enough to keep her from getting the money. You should just be glad your father did not put his girlfriend’s name on all of his property. She could have wound up with everything.
Len & Rosie
Dear Len & Rosie,