Sister feels that she is being punished for “living her own life”

Dear Len & Rosie,

For 24 years I have lived with my mother. I have been her care giver for the past 14 years. I gave up a lot of my life and personal happiness for her. I am not sorry I did this. My sister told me that she did not want to take care of mom, and that I could have the house if I did. She lives in another state and rarely visits.

Mother gave me one-half of the home so that we could borrow against the property. We qualified for the loan on my salary and her equity, and spent almost $100,000 on repairs and improvements. I pay the mortgage payments, taxes and insurance. The home is now worth $400,000.

Now my sister complains that she is being cheated out of her fair share of the home when mom dies. My sister says that she feels that this is cruel and that she is being punished for “living her own life”.

I have tried to explain to my sister that I have paid for the house and cared for mom, and that the house is my retirement investment. She doesn’t accept this, and I know she is going to cause trouble when my mother dies.

Donna

Dear Donna,

It is usually the children who do the least for their parents who put their hands out first and furthest when their parents die. Your sister is selfish now. That’s not going to change when your mother dies.

Your mother has the right to leave her assets to anyone that she wants. Some people think the only fair thing to do is to leave their assets to their children in equal shares. Others believe that they should give a little more to those of their children who have not been as successful in life as the others.

Still others, such as your mother, leave assets to the children who stand by them in their time of need and care for them as they age. Which way is the most fair? All of them. If your mother wants to reward you for caring for her, she may do so. It is her right to do whatever she wishes.

After your mother’s death, your sister may claim that you unduly influenced your mother and conned her into leaving everything to you. She won’t have much of a case if your mother added you to the deed to her home long ago.  If she did it recently, you may have problems as your mother is dependent on your care.

Your mother can best protect your inheritance now by reviewing her estate plan with a trusts and estates attorney, in a private meeting without you in the room. Let the attorney evaluate your mother’s capacity and verify that she really wants to leave everything to you. He or she can make sure your mother’s estate plan is up to date, and the attorney will also be a witness in your favor if your sister tries to sue you after your mother’s death.

Len & Rosie

Sister wants to leave everything to her half-sister.

Dear Len & Rosie,

I have a half-sister in poor health. She wants me to I get everything that is left in her estate when she dies. Her husband died and left everything to her and they had no children. In addition to me, she has two half-sisters; one who is very elderly and ill and another who is quite well off. She has listed my name only on her will, and my name is on all of her bank accounts as a joint tenant. She inquired about giving me a power of attorney, but her lawyer said that is was not necessary. Is this going to work?

Joe

Dear Joe,

Everything that you hold in joint tenancy with your half-sister will become yours if she dies before you do. You will need only to take a certified copy of her death certificate to each financial institution to remove her name from her accounts. There won’t be any probate for these assets. Keep one account open with her name on it so you can deposit any refund checks that come in after her death.

If your sister has any life insurance policies or retirement accounts, she should make sure that she has named you as her pay-on-death beneficiary so that upon her death you may roll over her retirement accounts into Inherited IRA’s and stretch out distributions, and your income tax liability, over your own lifetime. If there is no named beneficiary, her retirement accounts will pay into her probate estate and you will lose any opportunity to defer paying the income tax.

If your sister owns a home, she should see an attorney and create a trust or perhaps record a transfer on death deed. We do not recommend joint tenancy deeds to avoid probate for homes and other land, because if you’re on your half-sister’s deed, she’s no longer in complete control of her home and her home could become subject to a judgment lien from your creditors.

Her lawyer may be technically correct in that she does not need a power of attorney to avoid probate. But what if she becomes incapacitated? If she’s ever unable to make decisions and manage her own affairs then a power of attorney is vital. If you or another trusted person has her power of attorney, she will not likely need a court-supervised conservatorship if she ever becomes incapacitated. Likewise, she also needs an advance health care directive so that you or another trusted family member or friend can make medical decisions if she’s ever incapacitated.

If your half-sister, or her lawyer, is concerned that giving someone a power of attorney means losing control of her assets now, suggest to her that she sign a “springing” power of attorney. This is the type of power of attorney that takes effect only after one or two physicians certify that she can no longer take care of herself. Consider it as a “just in case something bad happens” document.

Len & Rosie