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Mom’s Money Misdirected for Lack of Instructions

Dear Mr. Premack: My mother passed in 2007, the Will was not filed by the Executor (brother) or anyone else. Mom’s $80,000 is in the possession of that brother for the last 13 years and was entrusted to take care of the money for our sister’s future care. He refuses to put it into a trust earmarked for our sister as well.   The money was deposited into a bank account so I believe his wife would have claim to half. He says he’ll dole it out (when my sister passes) to each sibling. I don’t want his wife to be any part of this if brother pre-deceases his wife.  I want my share now and so does my invalid sister whom I have been taking care of for those 13 years and longer. My brother refuses to take care of her but won’t free up the money that should go to each sibling. Can some legal means be applied to get our rightful share of the money? –RG

The first time I read your letter, I focused on your mother’s passing in 2007, the fact that she had a Will that was not offered for probate, and that you want your share of the money. But those are not the important facts in your letter. The important fact is that your mother’s money was somehow put “in the possession of that brother” 13 years ago – which would have been year 2000, seven years before your mother died.

You say the money was deposited in a bank account, and remains there to this day. If your mother simply wrote him a check or had the bank transfer the funds from her account into his account, the transaction would legally be presumed to be a gift of the money from her to him. Or she may have put the money into a joint account with survivorship rights, causing him to become full owner upon her death. Either way, she failed to issue legal instructions binding your brother to “take care of the money for our sister’s care”.

The law does, however, contain a concept called a “constructive trust.” If you can prove in court that your mother’s intention was that these funds be held for the benefit of your sister, then the court will impose a trust on the money even if your mother failed to create such a trust herself. But to impose a constructive trust, you will need to hire a lawyer, file suit against your brother, and prove to the court exactly what were your mother’s intentions back in year 2000. Otherwise, you must rely on your brother’s good intentions while you hope for the outcome you think your mother desired.

Here is one approach your mother could have taken instead of putting the money into your brother’s account: 1) discuss her intentions with a certified elder law attorney, 2) have the attorney create a will with a trust agreement inside, and 3) retain the account in her sole name until her death. Upon her death, the Executor appointed in her will would probate the will, access the funds and move them into the custody of the trustee named in her will. The trustee would be bound to follow your mother’s written instructions.

One more issue that the elder law attorney would raise: is your “invalid sister” legally disabled, and does she receive (or could she qualify to receive) any government disability benefits? If yes, then the trust for your sister’s benefit would have to be carefully drafted so that it would not disqualify her from receiving the government benefits. This is done with a legal tool called a “supplemental needs trust”. It may also be one reason that your brother is refusing to give your invalid sister “her share” of the money; he knows doing so would disqualify her from government benefits.

Your mother (and no doubt your father) worked hard to accumulate their savings. They should have been the ones to determine how and for whose benefit it was used. Because your mother failed to spend a few dollars getting solid legal advice, there is now a rift in the family and the possibility that the money is being misapplied. Your mother could have avoided these difficulties if she had not avoided seeking advice from a suitable lawyer.

Paul Premack is a Certified Elder Law Attorney and a Five Star Wealth Manager (Texas Monthly Magazine 2009-2013) practicing estate planning and probate law in San Antonio.

Original Publication: San Antonio Express News, December 9, 2013


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