Dear Mr. Premack: My parents were always married to each other (no divorces) and had five daughters. Both parents are now deceased. Both died without wills. After father died, mother deeded the house we grew up in to my third sister. I feel the house should be divided between the five of us. I don’t think that if something happened to my sister the house should go to her husband. Second, my fourth sister gave my parents a house and now she wants it back. My parents paid all the expenses for years (property taxes, insurance, upgrades, repairs, etc.). That sister also cleaned out my mother’s bank account and took all her legal and personal papers. Both parents always said whatever we leave after we are gone is to be divided equally between the five of you. Is there anything we can do to make sure everything is divided equally? – AKRP
Your parents made an all-too-common legal mistake: they spoke about their intent to be even handed but did not take the proper legal actions to see that their intent would be carried out. They died without Wills. Had they just made a legally binding estate plan, all of the divisive issues you discuss could have been solved.
As you may have read in many of my prior columns, when a person dies without a binding estate plan, the Texas laws of intestacy determine who receives the assets. Since your parents had only one marriage and all children were from that marriage, the law says your mother received fully ownership of all community property (like the house in which you were raised). Your mother should have seen a lawyer to be sure that the title shift to her was properly documented, and may have done so at the time she deeded the house to daughter #3.
You want that house to belong to all five daughters, because your parents always said that “whatever we leave after we are gone” goes to all five. Technically, your mother has honored that intent. How? She was owner of that house after your father died. She gifted it to daughter #3 while she was still alive. She therefore did not own that house on the date of her death, and it is not part of “whatever we leave after we are gone”. A lifetime transfer by the owner is a valid disposition of the asset. Sister #3 owns it, and it will pass according to whatever legally binding estate plan she makes (she can indeed legally give it to her husband).
What about the house that daughter #4 generously gave to your parents, but feels should be returned to her? If she deeded the house to them, she has no legal right to its return. If she had wanted it to be returned, then instead of deeding full ownership to your parents she could have transferred only a “life estate” to them. Under that arrangement, they would have lived there for the rest of their lives, treated it as their homestead, and paid all expenses. But the moment that both parents were deceased, their rights would have expired and title would return to daughter #4.
Because your sister did not reserve those rights, your mother was full owner of that house at the moment of her death. Texas’ intestacy law says that title to that house now passes in equal shares to the surviving children. Legal action is needed to properly document the title shift. Hire a probate attorney. Depending on the circumstances, a “small estate affidavit” may be the correct legal tool to transfer title. Otherwise, your mother’s estate could end up as a dependent supervised administration before the local probate court.
What about daughter #4 emptying out the bank account and taking your mother’s papers. We must ask if she was legally authorized. It may be that your mother listed #4 on that account “with right of survivorship” or as pay-on-death beneficiary. If so, she had the legal right to claim the account. If not, you can seek to become dependent administrator of the estate and seek a court order forcing your sister to return the funds and the paperwork she took.
As I said earlier, your parents could have made a legally binding plan to avoid this strife. For instance, they could have established a living trust. In it, they could have specified that after one of them died, the survivor could not sell or give away the house (like your mother did), but that it would pass equally to all five daughters. They could have placed the second house and all their accounts into the trust, and elected an independent third party to see that the assets were divided into five equal shares. Instead, they raised your expectations with nonbinding verbal assurances, leaving their daughters to fight over the assets. So, gentle readers, will you also default to leaving your families in this awful situation, or have you made a binding legal estate plan which you have kept up-to-date?
Paul Premack is a Certified Elder Law Attorney practicing estate planning and probate law in San Antonio.
Original Publication: San Antonio Express News, August 12, 2011