Elder Law - Len and Rosie


Mom’s sneaky plan

Dear Len & Rosie,

My parents both have wills. They have two kids, me and my sister. My mom has metastatic cancer, so she will probably die before my dad. The problem is that my dad does not get along with me and my sister. My mom wants to make sure that certain monies are left to me and my sister and that my dad does not leave them to someone else in his family. At the same time, she wants to make sure he still has his house, any joint accounts, anything else that they share.

So my mom has separate accounts with her name only on them, with me and my sister at payable upon death. If she puts, “I leave my entire estate to my husband”, will he have access to these separate accounts also? Or should she put something else in the will?

Kammy

Dear Kammy,

Assets in pay-on-death accounts are not subject to the terms of your mother’s will. Even if her will leaves everything to her husband if he survives her, the pay-on-death accounts should under most circumstances pass on to you and your sister without any difficulties. You can just show up at the bank with your mother’s death certificate and divide up the money.

The problem with your mother’s plan is that California is a community property state. Everything your parents earn during their marriage is owned by both of them equally. While your mother has the right to give away her half of the community property to anyone she wants upon her death, she can give away only her half.

If your mother funded her pay-on-death accounts with community property, then your father could claim, and rightfully so, that half of the money belongs to him, even though he’s not listed on the accounts. The pay-on-death transfers could be overturned because they would count as a transfer of community property made without the consent of both spouses under Family Code section 1101. Of course this will not be a problem if the money in the pay-on-death accounts were previously inherited by your mother.

Your mother is trying to provide for you and your sister because your father may not do so. But she’s doing it the wrong way by trying to be sneaky about it and putting money aside in pay-on-death accounts that your father may not even be aware of.

She can do better than this. She can leave you more. She could, for example, sever the joint tenancy on the home she shares with her husband and leave him only the right to live there until his death, rather than giving it to him outright. If she acts now and consults with a trusts and estates attorney, she can do a much better job of providing for both her husband and her children upon her death.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, at 996.4505, or lentillem.com. Len also answers legal questions weekdays on The Len Tillem Show, a podcast available via iTunes, Facebook, spreaker.com and lentillem.com.

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