I didn’t like my father, but I would like some of his money

Dear Len & Rosie,

I am a 60-year-old woman whose father died about five or six years ago. We weren’t on speaking terms for many years. I have been wondering if I perhaps have some claim to his estate. Is there some way to check on this? He died in Los Angeles. I didn’t like my father, but I would like some of his money. Any information I could get would be greatly appreciated.

Carole

Dear Carole,

When your father died, he left behind a will or a trust, or he died intestate (without a will). If he had a will or trust, you would not be entitled to any money or property at all unless you were specifically named as a beneficiary, or if the will or trust was written so generically as to grant property and money to “my children”.

Most professionally written wills and trusts have catch-all disinheritance language that excludes relatives and anyone else not specifically named as beneficiaries. So unless your father had a change of heart, it is unlikely you are entitled to a portion of the estate.

If you were named as a beneficiary in the will or trust, or if your father died intestate, then you were eligible for a portion of the estate. The personal representative of your father’s estate (either the executor if there was a will, or the administrator if there wasn’t) had a obligation to notify all heirs and interested parties of your father’s death - even family members who may have been disinherited.  The executor must exercise diligence and make all reasonable attempts to locate potential heirs and only the judge may excuse a failure to serve the probate papers upon you by mail.

Even if you were named in his will, you have little chance for recovery. In order to sue the estate you will have to prove in court that the executor more or less intentionally failed to notify you. The court, which approved the probate proceedings after your father died, would be very unlikely to change its mind and order the other beneficiaries to cough up a share of their inheritance to give to you. Look at it from their perspective, “Five years ago, the court said we could have this money, and now they want it back?”

You should also keep in mind that your father may have had a trust that avoided probate altogether. You should check with the court clerk in Los Angeles County to see if there was a probate of your father’s estate. You could also check the chain of title to his former residence to see whether or not he ever owned his property within a trust. If he did, you should be able to determine the name of the trustee. Contact that person and ask for an explanation.

Remember that it’s almost certain that your father deliberately left nothing to you, given your estrangement. Keep this in mind when you decide how much of your personal effort, and money, you want to sink into this.

Len & Rosie

California’s joint tenancy law

Dear Len & Rosie,

My aunt passed away in January. She had established a trust in 2002 but she failed to transfer some joint tenancy stock holdings into the trust before her death. We always intended for those stocks to become part of the trust. I am both the surviving joint tenant and the trustee of the trust and I want to transfer ownership of those stocks into the trust before distributing the assets, but I am getting conflicting advice about the legality of doing that. My stock broker says, “Fine. No problem. Just fill out the transfer documents.” But my attorney and CPA have told me that such a transfer either can’t be done or isn’t legal to do.

Maureen

Dear Maureen,

Trusts, for the most part, are not public documents. As long as your aunt’s taxes and debts are paid, and as long as you make the trust beneficiaries happy, then you probably can simply transfer your aunt’s joint tenancy stock into her trust and then divide the stock up in the manner provided for in the trust instrument. Doing this is not illegal. It is not a crime, and it won’t get you sued by the trust beneficiaries because they’ll get a share of the stock instead of it all going to you.

But there may be some complications. Suppose you are disabled. Since the joint tenancy stock belongs to you as your aunt’s surviving joint tenant, if you make a gift of the stock into her trust, you could be subject to transfer penalties for Medi-Cal and SSI benefits.

Or maybe you’re rich. If you are worth anywhere near the amount that passes free of Federal Estate Tax on death ($5,450,000 for 2016), then if you gift what is now your stock into your aunt’s trust then you will have made a gift to an irrevocable trust that will be subject to gift tax, payable by you, which could increase the amount of federal estate tax payable to the government upon your own death.

The way around these problems is to petition the court seeking an order declaring that your aunt’s stock doesn’t belong to you, but belongs to the trust instead. Under California’s joint tenancy law, the stock was 100% your aunt’s property, assuming she acquired the stock and added you to the title later. And if your aunt listed these stocks on the Schedule of Trust assets attached to her trust document, then she effectively assigned her stock to the trust, despite never having transferred title to herself as trustee.

There may be other complications that can make it a bad idea for you to transfer the stock to the trust, either with or without a court order, so if you want a real second opinion, this column isn’t enough. You need to sit down with a trusts and estates attorney and review your aunt’s stock and her estate plan to make sure that funding the stock into the trust won’t create complications for yourself.

Len & Rosie