James and Virginia Null were always fair, dividing everything equally among their three daughters. They worked hard at avoiding any hint of favoritism—going so far as to buy three sets of everything—china, crystal and jewelry—so there would be one to pass on to each daughter.
But fairness took a nosedive when Virginia Null died in 2000 at the age of 62. Within weeks of her death, her husband changed his financial arrangements.
He designated his middle daughter Amy as a joint tenant on his financial accounts with the sole right of survivorship.
He added Amy to the title to his house.
Upon his death in June 2002, almost all of Mr. Null’s assets, estimated at several hundred thousand dollars, went directly to Amy. Her two sisters received next to nothing.
This article in The New York Times, Personal Business; A Legacy of Rancor: Estate Fights Rising, illustrates a battle that’s becoming increasingly frequent.
Mr. Null’s Will, written in the early 1980s, stated that his estate was to be divided equally among his three daughters, but “the right-of-survivorship clause and joint tenancy upstaged the will completely,” said Adam Gaslowitz, an Atlanta lawyer who is representing the two other sisters who are contesting the estate.
Litigation more common as family strife over inheritances increases
Lawyers say this is typical of suits contesting Wills, often filed by baby boomers whose parents are now in their 70s and 80s. Mr. Gaslowitz has written on this topic for law journals, and he has seen a steady increase in estate fights among the children.
“A lot of people are living off the parental dole. As their parents near the end, these children grab as much as they can and are far less willing to share it with their siblings.” An uneven economy, layoffs and shrunken retirement plans have hurt many. A huge number of baby boomers have done nothing to prepare for retirement, and accumulated assets from their more frugal parents become a critical part of their retirement planning. When things go badly, people realize that they need their inheritances.
The huge transfer of wealth was misstated
”There had been some papers in the early 1990s that suggested there would be this large transfer of wealth from the current retirees to the baby boomers,” said John Gist, the associate director of the AARP’s Public Policy Institute. ”But we concluded that this was not going to be the huge windfall that everybody had thought.”
Amy stepped in after her mother died
In the case of the Null estate, the two sisters argue that Amy Osborne–who lived ten minutes away from their father and handled many of his financial affairs after their mother died–persuaded him to change his financial arrangements. The sisters believe he had no idea what he had done, that he was vulnerable and dependent, recovering from complicated heart surgery.
Amy’s lawyer assures us that he knew exactly what he was doing
“If elderly parents favor one child over others because of that child’s contribution to the parents’ wellbeing”, they have every right to leave their estate to those who are most deserving.
As the family planned the funeral, the other sisters began to realize that something was wrong. Shortly thereafter, Amy served them with papers—they had ten days to contest the distribution of the estate. Blindsided by the turn of events, the sisters contacted a lawyer. Said one sister, “I thought this would never happen in my family. I was so naïve.” The bottom line: When there’s money involved, funny things happen in even the closest families.
It’s important to note that even with a Living Trust, assets that have a named beneficiary, such as a life insurance policy, an IRA or a 401(k), assets held in joint tenancy, and those that are Payable or Transferable on Death fall outside a Living Trust.