It’s best to have an estate plan, even if it’s a simple will

Dear Len & Rosie,

My partner of the past ten years passed away recently. He did not have a will. His only assets were a mobile home and $42,000 in a money market account. He has three grown sons with whom he had not been on speaking terms for the past four years. Although we did not live together, my name is on the title of the mobile home as a joint tenant.

His sons have become hostile toward me. Is there any way they would have rights to any proceeds I might receive from the sale of the mobile home? Also, I have paid for all of my partner’s burial costs with my personal credit cards. Do I have a legal right to be compensated by his evil sons?  I was just planning on absorbing the cost, but since they are causing me so much grief, I would like to make them pay if they are legally bound.

Suzanne

Dear Suzanne,

You should not have to worry much about the mobile home. It’s yours as the surviving joint tenant. All you need to retitle the mobile home in your name is a death certificate and California Department of Housing paperwork the title insurance company will prepare for you in escrow when you sell the mobile home.

Your partner’s sons could try to sue you for the mobile home. They could claim that their father lacked mental capacity when he put it into joint tenancy with you, or they could claim that he was the victim of your undue influence. It is not likely that his capacity will be in question, especially if he added you to the title of the mobile home years ago.

An undue influence claim can be made if you procured the documents adding your name to the home and your partner held you in a position of trust and confidence. If this is the case, then the burden of proof may be on you to show that your partner gave you his home of his own free will and not as the result of your “manipulation”. Not that we’re saying you manipulated him, of course.

Realistically, his sons probably do not have a good case, and there’s not enough money involved to get most lawyers excited enough to offer to take the case on a contingency fee. This means the sons will have to sue you on their own nickel, and they are not likely to do that.

The sons could be made to pay your partner’s funeral and burial expenses if they are inheriting the money market account through their father’s estate. The estate is subject to the creditors claims and the costs of funeral and burial expenses. But, if they are willing to grudgingly accept your ownership of the mobile home, it’s probably better to follow your initial instincts and let them keep the money.

The lesson learned here? It’s best to have an estate plan, even if it’s a simple will. If your partner had hired a lawyer to prepare a will for him, the lawyer and his or her staff would be available as neutral witnesses as to what your partner’s wishes really were with respect to the disposition of his assets.

Len & Rosie

The problem with being a trustee

The problem with being a trustee is that despite being closely related to the trust beneficiaries, you still have a fiduciary duty

Dear Len & Rosie,

My father passed away a year ago. He had a living trust and my brother is the trustee. There are five children surviving. My mother is also deceased. After my dad’s death, my sister, my brother the trustee and I began clearing the house of forty-five years worth of possessions. We took out two dumpsters of garbage, and gave loads and loads of items to the Goodwill. This took us many emotional months to accomplish. Our other two siblings were not interested in helping and when asked if they wanted anything responded by telling us to take whatever we wanted. The valuable items were divided - we got first choice as the other two were not interested - but we did give them a share.

Now my brother the trustee received a certified letter from our oldest sibling stating that she is entitled to an accounting of the distribution of the items. We do not know her motive. She may request some of these items or maybe she wants money. What is our legal obligation to her request? Isn’t the trustee entitled to divide the items as he believes is fair?

Annette

Dear Annette,

The problem with being a trustee is that despite being closely related to the trust beneficiaries, your brother is still a fiduciary. He’s like the person standing behind the counter at the bank. He owes each beneficiary a fiduciary duty, which is equally a duty of competence (don’t mess up) and a duty of loyalty (treat all beneficiaries fairly).

As we have told readers before, a trustee of a trust has as much work to do as the executor of an estate in probate. The advantage of a trust is that your family gets to avoid the built in time delays of probate, as well as the statutory probate fees that are very lucrative for lawyers.

A trust also gives a family the opportunity to cut corners. If everyone gets along, trust administration could be little more than a paperwork drill of paying off debts and taxes and shoveling everything into the names of the beneficiaries. But the decision as to whether or not to take the “quick and dirty” route isn’t one your brother the trustee gets to make. Trust beneficiaries are entitled to an accounting, and if your older sister did not waive an accounting, she’s still entitled to one.

Your brother has a choice. He can either attempt to provide your sister with an accounting, or he can ignore her and hope she’ll go away. Just understand that if she hires a lawyer and petitions the court, there is a very good chance the judge will order a full accounting. Your brother can argue that your sister waived a trust accounting, at least with respect to the personal possessions, but he hasn’t got anything in writing.

People like your sister who are unwilling to pitch in and help the family when there’s an illness or death are the same people who insist on squeezing every last dime out of a trust or estate, no matter how much work others have to do. Both behaviors are an expression of selfishness. The lesson here is that trustees should seek legal help when administering a trust, if only to make sure that they are doing everything correctly and that if they cut corners, they aren’t going to expose themselves to future liability.

Len & Rosie