Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

June 29, 2012
How do we ensure all siblings receive their inheritance?

Q. My 80-year-old mother had a living will done many years ago specifying that all assets, including her house, be divided equally among her five children. My sister and a deceased brother got my mother to take out several loans of more than $100,000 for their children's college and to buy a house. My sister has power of attorney and moved her adult son and his family into my mother's house. (Mom still lives there.) My brother's widow lives in the home my mother loaned them money to buy. My other two siblings and I have been ostracized from my mother and sister for raising ethical questions and reporting possible fiduciary abuse to authorities.

My mother is in extremely poor health. When she dies, what will happen to the house that was supposed to be sold and divided equally, if my mother still owes money for loans she made using the house as collateral? Mother is on Social Security and has no other assets of value. What can be done to ensure we all receive our inheritance?

A. You are in a difficult situation. Let's review some of the issues.

First, you mention that your mother has a "living will." A living will is a type of health care document that does not deal with the transfer of one's assets at death. You probably mean a "living trust," which is created during one's lifetime and widely used to avoid probate and plan for mental incapacity. However, you may mean a stand-alone "will," which sets forth one's wishes for the transfer of assets at time of death and is administered by an executor using the court probate process.

Regarding the "loans" to your siblings: Do you know if promissory notes were signed? If not, your sister and your late brother's family may claim that the money was a gift from your mother, not a loan. If there are promissory notes, your mother's will or trust may forgive the loan amounts. Or the loans could be treated as part of their respective shares, reducing the amount of cash each receives from the sale of the house. These unknowns are among many factors that affect whether her five children will receive equal cash distributions.

If you have not been in contact with your mother recently, you may discover that she changed her estate documents to favor certain siblings over others. If so, she may have made the decision freely on her own. Or it may be that relatives used their close relationship with your mother to persuade her to favor them.

It is difficult to find out these answers, particularly when you aren't seeing your mother often.
If you have evidence that your mother is suffering from undue influence and/or elder abuse by family members, you can seek a conservatorship for her through the county probate court. An independent private fiduciary could serve as her conservator.

Your questions raise many issues. I recommend that you meet with an experienced trust/estates attorney to discuss your situation in detail. Good luck!

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at cbuck@sacbee.com

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.



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