So You Think This Can't Happen? Think Again?

Mrs. N. 57  a widow for 2 years died unexpectedly of a heart attack in California June 2005.
Unfortunately  she died without a will,  living will or  other estate planing documents. 

no will

She had  a   married sister,  two  children  and two  grand children at time of death .

                1  -Her son -  a  long term non employed 37 year old son living with his girl friend in  North Carolina – with a 16   yr old daughter  in Montana who he doesn’t talk to, from a  prior girlfriend  whom he never  married.   The granddaughter and mother  have  had no contact with the family since the granddaughter was approximately 4 years old. 

                2- a 31 year old married professional daughter living in Texas  with a 4 year old son the   apple of grandma’s eye.

Mrs N's Assets  at time of death included

 1-      Her house worth 775k (paid off) when she died in June 2005

  2-     50 k company stock  in her husbands 401k plan which she had  never claimed

  3      180k in liquid assets cash stocks bonds etc

  4       Photos, jewelry, mementos etc. from her mother ( that were left in her mother's  (Rose's ) will , equally to   Mrs N.   and her sister but were at Mrs N's  house because Rose  had lived with Mrs  N. until she died 4 years ago and Mrs N.  didn't want to part with them    

  5   A 100K  15 year old term life insurance policy - she wrote on the policy face ( her copy)  it was for her grandson’s college education, when she renewed  it for another 10 years 5 years ago.  

  

  Mrs N's know wishes,  known by her son, daughter and sister.

  

burial at sea

 A-     To have her ashes scattered at a special beach  in her homeland and not be buried next to her cheating husband.   

    B -      To have all her mothers jewelry, photos and memento's given to her sister due  to memories involved.

So what actually Happened ?????????  

A -  Mrs N's diseased  husband's   domineering New York  mother descended and insisted that   Mrs. N be buried in the dual plot she had previously bough for Mrs. N. and her son when he passed away.  No one stood up to her and Mrs N. is  now buried next to her husband.

B - While looking for a will in Mrs N.s house at time of death,  the  son  and son in law divided up all the jewlery  and family history  photos ( most were thrown away) left  by Rose  in the house,  leaving none  to the sister who was the rightful owner.

C The  grieving daughter agreed to let her brother  come to California and live in the house, incurring reasonable expenses during probate,  to be sole executor of the estate,  waiving  any fidelity bond and any  waiving any  required accounting of estate activities.

 D - The  named beneficiary in Mrs N's  insurance policy  had never been updated,  it was the deceased husband.  The son and the granddaughter were named as contingent beneficiaries.  The insurance company paid  the insurance policy 50/50 to the  son and granddaughter.  The grandson got nothing. 

party in a spa

E - The son decided that "since his life was on hold administering the estate" he was entitled to a first class life style paid for from the estate while he "had" to be in California.  All  his personal expenses,   gas, car food both purchased at the supermarket and  dining out, athletic club expenses,    as well as a portable hot tub purchase and parties at the house for his "friends" where  paid for by the estate.    This along with true estate expenses and legal and probate fees  ate up  significantly  more than the  180K of liquid assets in the estate during the 21 months it took to  sell the house and  close probate.  

F- Because  Mrs N's death was near the  height  of the hosing market  and the sale of the house dragged on because the son wasn't willing to accept a lower price and didn't wan to give up living there it finally sold  for $  595,000 ( a fire sale price) as both son and daughter needed the proceeds form the sale as money was spent that was not yet inherited and paid out .

G- The 401k stock was distributed to both son and daughter but only after the NY Grandmother signed away her contingent beneficiary rights with much hard feelings. 

Was that it?   not quite !

old fashion fighting over assets

  1 the daughter sued her brother over estate  mismanagement but basically due to the agreements the only ones who made money were the lawyers on both sides. 

 2 The daughter let her husband invest the  her part of the proceeds,  not understanding any of the investment decisions he was making .  He took a very aggressive approach, and they panicked and sold  near the bottom of the 2008  stock market decline losing about 40% of their investment. 

3- The  son continued his high end life style as well as  investing a large amount of money in a "can't go wrong" investment with one of his friends. All his money has been gone for some time.

And there is more

The New York Grandmother  died and left all her assets to the  grand  children of her 2nd husband, that she had met in Florida during retirement, because she was so incensed at her only two biological grandchildren over what had happened.

Conclusion

Something to be said for paying attention to estate planning, and getting good advice during this trying time when your decisions may be clouded by grief.