D. Marie The Moneyologist: My father died and my sister emptied the $100,000 in his bank account
Terrence Horan/MarketWatch
Dear Moneyologist,
During Christmas 2012, my father told my sister and me that he had made my sister a signatory on his bank account so she could pay bills from his bank account when he died. He looked at us and said, “The rest gets split between you two.” He died suddenly five months later (my mother predeceased him two years earlier). Despite what he told us, my father did not have a will. After nearly four months in probate I learned that Dad had accidentally made my sister an owner of his bank account, not just a signatory. The law firm we hired says this happens often and is usually corrected in the will or by the heir receiving the extra money.
That never happened. My sister refused and kept the $100,000 that was in the bank account — and got reimbursed for the bills out of the other assets of the estate. I have cut off ties with my sister, which was not that hard, since we were never close. She lives in Boston, where we’re from, and I live in Virginia, but I pass on family events because I don’t want to bring our drama to someone else’s special day. As a result, I have been accused of forgetting my family, even though I send birthday and Christmas cards, and no one thinks to call me for my birthday. My sister said that when I say Dad made a mistake, I’m really saying he was stupid.
What can or should I do?
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S. in Virginia
Dear S.,
I’m sorry to hear that you lost your parents, especially under such difficult circumstances. Losing a parent is hard enough without having to navigate the emotional and legal quagmire of trying to honor your father’s wishes, especially when he has left no will to support those wishes. Family arguments resulting from estates of parents do not, alas, appear to be uncommon. And the singer-songwriter Prince died earlier this year without leaving a will, according to court documents filed by his sister. Although this may be small consolation to you now: You’re not alone.
I’m sure that your father would hate that you are letting this affect relationships within your extended family.
Legally, you are on shaky ground. “People so often add a child to a bank account thinking that it’s the easiest way for the child to help with bill paying, not realizing that jointly owned bank accounts pass by operation of law to the surviving owner,” says Kathi L. Ayers, a principal with Vaughan, Fincher & Sotelo, a Vienna, Va.–based trust and real-estate law firm. In such cases, the co-signee often agrees to share the remaining funds, she says, adding that “they are not legally obligated to do so.”
Read: I give my son money and his wife gives it to her church
In Virginia, if you can show “clear and convincing” evidence that the account was made joint only for convenience, you could potentially win a case, Ayers says, but given the sums involved here the legal fees would eat up a lot of that. This does not apply to property, if your father owned any. “If there’s no will, then all property in the decedent’s sole name passes through the intestacy statute in the state in which the decedent resided. In Virginia, it would go to children equally.”
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That leaves you without closure. What can you do? You can do a lot. You can go to your family’s events, remember their birthdays and leave the $100,000 question of who should inherit your father’s money aside. While it’s likely that he would not care for the fact that your sister has kept the money in his bank account, I’m sure that he would hate that you are letting this affect relationships within your extended family. Show up for your family, and close this chapter in your life.
Also see: Why double dipping at the movies could land you in jail
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Published at Sat, 15 Oct 2016 17:07:14 +0000
