Figuring Out the Will

[clydeva]

What is the name of your state? Virginia

My father-in-law passed away recently. For the past couple years, he has been in a state of severe mental decline. Just before he went into the hospital for the first time, two years ago, his two daughters secured POA for his affairs. They then proceeded to take care of all his medical care and financial affairs. There are eight siblings in total (my husband is the sixth child) and he is divorced from his wife although they were best friends and she remained dedicated to him until the end. During the time that he was sick, my sisters-in-law would consult on matters with the family, but in the end, would make the final decisions. Last September, they said they needed to sell my father-in-law's house in order to continue to pay for medical care. At this point, he was in a nursing home. We pleaded with them not to do that, and offered to pay for medical care and have the estate pay us back when he died. Another brother offered to do the same. The sisters rejected the offers and threatened to put the house on the market.

Problem is - everyone knew, and the Will stated, that any cash at the time of death would go all to one of the sisters, and the cash from the sale of his house would be split 50% to his ex-wife, and the remainder divided among the remaining children. It also stated that my husband had first right to buy the home. The sisters did put the house up for sale, and my husband and I bought it - but only with the agreement of the youngest sister to split the cash from the estate according to the 50% to her Mom, and the remaining amount amongst the others.

He died a couple weeks ago. My husband is the exeutor of the estate. We have now found out a couple additional details. First, when the sisters first got POA, they took my father-in-law's money from his checking account and put it in one of their own personal accounts, and then "kept track" of how much of it they spent on his care, etc. So, to me, that is a serious co-mingling of funds that never should have occurred. Secondly, they never filed a tax return and he will owe taxes for the sale of the house and we have about a week to get an extension filed. Problem is, my husband does not want to take the will forward as it is, since it will get processed and all the cash will go to the one sister, as stated. However, she refuses to act quickly enough to draft a legal document to change the will and have it disbursed according to the 50% to her Mom and the rest to the others. So now the estate will have to pay for penalty and interest when the taxes do get filed. Now she is saying she is going to take the money and she will disburse it to everyone.

My questions:
Is there any way to get the probate court to audit what has happened to my father-in-law's assets since my husband's sisters took control with their POAs? Does this automatically happen during probate? Wouldn't she be liable for gift tax on the money, since she put it in her personal account?

My husband is thinking about simply giving up his executor status to the state because all the rest of the siblings are going to contest the will if it gets filed as is, without the additional instructions from the sister. Can my husband do that and still be eligible to contest the will?

 

[pojo2]

Do you all have a tax professional to determine if there is truly taxes due on the sell of the house? Did he live in it 2 out of the last 5 years? Are you talking State or Federal taxes?

How much is the estate worth?

Yes, a major portion will be eaten by Attornies as it now stands with everyone contesting the will.

Has your busband as executor hired an Atty to assist with this since there appears to be so many discrepancies? If not he needs on NOW!

 

[BelizeBreeze]

you need to have a probate or tax attorney look at the entire situation but from your description of things, there really is not a legal matter.

If the sisters had poa then they had every right to sell the home to pay for pop's medical care. And medicare would have required it.

The will, in this case, does NOT control.

 

[clydeva]

I was talking federal taxes. Is it possible that he won't owe because he really hasn't lived there for the two years preceding the sale.

The estate is worth about $300,000.

I know they had the right to sell his house, but we're not sure they needed to ... remember one of the sisters took his checking account money (about $80,000) and put it in her OWN account, in the beginning.

My husband has contacted an attorney and will be meeting with him soon - I just wanted to get some opinions beforehand.

Thanks for your replies.

 

[Dandy Don]

Major question you need to be figuring out: did father-in-law have an attorney's assistance when drafting his will and was it witnessed by people who were not his relatives, or is it more likely that the daughters or POA selected the attorney who wrote the will to favor them and pressured him into signing it?

If there is medical evidence from his medical records or from his physicians that his mental state was impaired during the date he signed the will, it can probably be voided since a person with diminished mental capacity is not allowed to enter into any legal transaction. That would be grounds for contesting the will, but a contest is expensive, costing thousands of dollars for legal fees on both sides (along with further delaying probate) and you need to examine this with your attorney to see if that is the correct course to pursue

But you may not need to contest the will IF sister POA is going to provide an accounting of how she spent the monies. If she doesn't provide receipts to back up her accounting, then one can probably assumed that she spent any monies not accounted for on herself. Right now we don't know if she stole or if her intentions as carried out were responsible and correct in the manner that she spent the monies for his personal care. Your attorney also needs to look at whether Virginia has any laws on the books about abuse of power of attorney and whether it has occurred here or not.

How much money was in the account at the time of death?

Did that include the money from the sale of the home or not?

The complication here is that the provision in the will about splitting the cash from the sale of the home is not enforceable and doesn't apply since the sale has already occured before the death and the money has already been put into the account and that is why sis got POA because she knew she could get access to this money and probably hoped that she would be able to keep all of it without having to account for it (looks like she got a very smart attorney to figure this wording out to benefit only her!!). And the executor needs to be checking at the bank to see if your father-in-law had officially designated a beneficiary for that account BEFORE the POA submitted her request for the money.

Depending on how much money she is willing to distribute, that may be the most advantageous outcome for everyone involved. A most interesting situation which I hope you will let us know the outcome of at a future date!!!

DANDY DON IN OKLAHOMA ([email protected])

 

[clydeva]

Thanks for your reply, Dandy Don, and for sharing your thoughts.

No - the will was drawn up properly by an attorney about 16 years ago - the youngest sis was the last of 8 and in college, so she was to be given the cash in the bank. Others were to split cash from sales of property.

Everything was fine until first we found out the other day that when the two sisters got POA, they closed his checking account into the older ones personal account! She said the people at the bank told her to. My only concern is that there is a complete accounting of what it was spent on and I want to know if that happens automatically, or should we alert our attorney who should tell the probate court? Because it won't go to probate since it wasn't in his name when he died. Also, she should have to pay a gift tax possibly, since she essentially gifted it to herself.

And yes, the problem is is that at the time of death there is ONLY cash - almost all from the sale of the house. All property had been sold either before he got dementia or after when money was needed for his care. So technically, youngest sis gets it ALL, but had promised to split it as is called for in the will, since the house proceeds were supposed to be split. Of course, now she wants it all and says SHE will distribute it. I don't think they got POA because of the way the will was structured, but we thought it would look like they sold the house because of the way the will was structured. However, another post today said that medicare would've required that the house be sold if to pay for his care.

Basically, sis who is supposed to get it all can amend the will as she promised so that the cash is split as the cash from the house was supposed to be split and then my husband can file as executor and get the taxes filed and get it to probate. Without her amendment as she agreed, if we submit the will as is, she will get it all and never have to honor her promise. So there are six male siblings waiting to contest it if it goes that way.

 

[Dandy Don]

Who told you sis had power to amend a will? That is not true but I'll let your attorney figure out this mess!!

 

[clydeva]

I know. It doesn't sound right, but a lawyer my husband spoke to on the phone said she would be able to, since she is the only one that is getting anything, cuz the whole estate is now cash and she gets all the cash. We'll see. She is now saying that she is going to a lawyer next week to get it done. My husband is also seeing a lawyer next week. I guess if she can't split it up during probate, she will do it after she receives it. Seems like she's coming around (but I'll believe it when I see it) and choosing family over money. It's sad that this has to happen every time someone in the family dies, which has been my experience.