Q: My mother was recently diagnosed with late stage cancer. Two years ago, she divorced her husband and remarried. Before remarrying, she placed her divorce settlement in a savings account with me (her only child) as the sole beneficiary. My mother’s new husband is not named on the account and the money was all hers before they married. My mother wants me to get all the money in this account. Does she need a will to state this or is me being the sole beneficiary enough? Does her new husband have any claim to the money? How does she make sure that her wishes are carried out? (Greentree, PA)
A: I am sorry to hear about your mother’s diagnosis. If you are a named beneficiary, the money passes to you upon the death of your mother and does not become estate/probate property and therefore does not pass to the heirs in her will. In Pennsylvania, her estate or you, depending on how the will reads, would pay inheritance tax on this. In Pennsylvania, a spouse who believes he or she was disinherited by the will, or not left enough money by the will, can challenge the will by “electing” to take against the will. This election must be filed in the Register of Wills within 6 months of death or 6 months of probate. This means the disgruntled surviving spouse who elects to do so, may choose to not inherit through the will but instead take a percentage, one-third, of certain non-probate assets. The PA statute on this is arcane and convoluted and difficult to understand. If you think it is a possibility that your stepfather would challenge your mother’s will, you may want to consult with an attorney now. The attorney would need to know the extent of your mother’s present assets and do the math on what potentially her husband would be entitled to under PA law. Keep in mind that as your mother owns this account, you have no right to it while she is alive, and she may liquidate it as needed to pay for her care as her needs increase with age.
Q: A father died, and he was married with 2 children in that marriage, a twelve-year-old and an eight-year-old. He also had a child from a previous relationship who is 18 years old and attending college. The father had three life insurance policies of $250,000, $250,000, and $200,000 for a total of $700,000. The widowed mother has no intention of giving the 18-year-old step-daughter any money. I don’t know how the policies are named, but I do know the widow does not want the step-daughter to know she received payouts from these policies. Does the eighteen-year- old have a legal claim to any of this life insurance money? (Scott Twp., PA)
A: Insurance policies will be paid to living beneficiaries of the decedent. If there are no living beneficiaries, the policy will likely be paid to the estate of the decedent. If there is no will in place, the proceeds of the policy will go in to the estate and paid to the intestate (no will) heirs. Under PA intestate law, the daughter is an heir. It is possible that the proceeds of this policy could have been addressed in a divorce or prenuptial agreement, which therefore could preempt the intestate or testate laws. If this child was a beneficiary listed on the policy or if there are no living beneficiaries on the policies, she has a chance of receiving money. If the step-mother is hiding the information on the policy, hire a lawyer to threaten her or take her to court.
Q: My Aunt passed away in January. Her husband passed many years ago. She gave me keys to her home. Years later she had me sign a paper making me a beneficiary on her insurance. 5 yrs ago I noticed signs of dementia. My cousin also spoke regularly with my aunt and worked for a wealthy family and went to prison for embezzlement. She married the son of a funeral home owner, that was accused of stealing from clients. He moved his family to the south. When my cousin got out she joined him. After his father passed they relocated back here and he took over. I used my aunts key 1 time when my daughter and I went in to clean up after her dog and bathroom before she came home from the hospital. My cousin manipulated her and accused me of stealing papers from the house. I had helped my aunt with a bankruptcy and didn’t need to steal. They disposed of everything she owned and put her in a nursing home where I would visit her. After she passed they called me to say I need to come sign papers to get a check. I told them I needed a lawyer to look at them. They didn’t look right so I called the insurance co, filled out the claim form, and no assignment papers. I asked for a check to me. (Valencia, PA)
A: What is the question? If in fact you are the beneficiary of an active insurance policy, generally, all you need to do is fill out their claim form and any other forms they want such as a death certificate and copy of your ID. You should then receive a check. I have no idea why the insurance company wanted you to come in. Perhaps they want you to sign the insurance proceeds over to them to pay for the funeral. If the policy is payable to you only, you have no obligation to do so. If your aunt assigned the policy to the funeral home, that is another matter. PA does have a filial law statute whereby certain next of kin are obligated to pay for medical debt of the indigent but let them explain how that applies to you.
Q: My husband had a pretty nasty divorce and his ex-wife has made comments to their adult children that “she has plans to sue me in the case that he dies”. Does she have this right and can she sue if we have a good will in place? (Jeanette, PA)
A: Once divorced she no longer has rights to inherit from him under the intestacy (no will). In his new will he can leave his property to whomever he wishes with no obligation to her. As a precaution, he may want to check his insurance policies, annuities, 401Ks and other non-probate property to make sure he has removed her as a beneficiary, and replaced her with someone else. This is not a difficult process. It usually involves calling the financial company and having them mail you a change of beneficiary form. The forms are often on-line. I would make an appointment with a local attorney for a will and other estate planning documents.
Q; Can an estate administrator defraud a sole beneficiary of an IRA account that mom left her by telling her that monies HAVE to go into the estate account? The beneficiary can prove she’s sole beneficiary of the account and can prove the administrator told her it had to go into estate. Can administrator use the “I didn’t know it didn’t need to go through estate” as a defense? Is ignorance a defense? Or, isn’t that her fiduciary responsibility as administrator to KNOW what accounts are placed in estate or not?
A Yes, she should know. If what you are saying is correct, the Administrator is wrong. I assume the Administrator is hacking her way through an estate without legal representation? If an attorney was representing the Administrator, this wouldn’t have happened. I find it highly unusual that a financial company would pay out a claim to and estate when there was a beneficiary listed on the IRA. You may want to hire an attorney to inquire and/or file a petition for a court accounting.
Q: What are my rights as beneficiary on deceased brother beneficiary designation form? My brother died without a will, but I am listed as one of his beneficiary on his employment form, the lawyers are stating that this goes money goes into the estate and is to be shared by everyone, is this correct? There are stock certificates, life insurance etc. that he marked and the lawyers won’t hand over the original certificates so that we can transfer them to our names. I am also one of the co-administrators. Please answer asap. Thank You.
A: I really would need to examine the documents to be certain with my advice. However, generally, if you are listed as a beneficiary on employee benefits like 401 Ks or pension or insurance, that is your money and not estate money. Generally, if you are a beneficiary, the company will prefer to talk to you and will not want to deal with the estate attorney. Call the company and ask if you are the beneficiary. They won’t lie to you. As to the other problems, estate issues, I am not sure why you are having a problem with the attorney as the executor/administrator generally can hire and fire an attorney for the estate. Maybe this is perhaps because you are not getting along with the other attorney. I highly advise you to see an independent lawyer versed in estate matters.
Q: Can an estate administrator defraud a sole beneficiary of an IRA account mom left her by telling her that monies HAVE to go into the estate account. The beneficiary can prove she’s sole beneficiary of the account and can prove the administrator told her it had to go into estate. Can administrator use the “I didn’t know it didn’t need to go through estate” as a defense? Is ignorance a defense? Or, isn’t that her fiduciary responsibility as administrator to KNOW what accounts are placed in estate or not
A: Yes, she should know. If an attorney was representing the administrator, this wouldn’t have happened. I find it highly unusual that a financial company would pay out a claim to and estate when there was a beneficiary listed on the IRA. It is highly unusual. You may want to hire an attorney to inquire and/or file a petition for a court accounting.