MIL estate issue...

[REWahoo]

MIL died without a will. DW and BIL recall attending a meeting with their dad and his attorney to discuss probate. FIL told the attorney the only assets in his wife's name was a checking account with a few dollars in it. FIL agreed that wasn't worth going through probate and abandoned the account and MIL's estate was never probated.

Fast forward 12 years. FIL suffers a stroke and is in a nursing home, DW has power of attorney and is managing his finances. She has known he has a couple of thousand shares of a bond fund and has been receiving monthly dividend income for many years. Come to find out, the shares are in two certificates, one in her dad's name and one in her deceased mother's name. FIL has been getting two monthly dividend checks, one made payable to him, one to his deceased spouse. He never bothered to tell the fund company she was deceased or go through the legal steps to transfer ownership to him. For more than a decade he's deposited both checks in his checking account and his small town bank complied without a problem.

Now to my question (finally): what should DW do? Assuming the bank will allow it, should she say nothing and continue to deposit the checks payable to her mom into her dad's account? Or should she discuss the situation with her dad's attorney? My concern is whether the legal entanglements will be worse if she waits until her father is deceased to address this.

Also, this could get messy if he depletes his funds and gets into a Medicaid spend down situation. The ownership of the shares in his deceased spouse's name could cause problems and I'm wondering if it needs to be resolved now rather than later.

 

[freebird5825]

Armchair quarterback opinion...and I'm going to assume the accounts were not JTWROS in the first place.
There should not be a problem with FIL inheriting the account from MIL, intestate or not.
In my own direct experience, probate was necessary only if there were assets greater than $X. So no foul there.
If DW presents a death certificate (MIL's) to the fund company to try to change the account registration from MIL to FIL, their response may be, shall we say, unhappy ? Who knows that they may do.
Bottom line, I would say it is best to go see the attorney. He(she) may be able to file a quick petition to the probate court and transfer the MIL's assets to FIL and skip any outside parties' messiness.
Under the circumstances, it may be prudent to see if DW's and BIL's name can be added as JTWROS unless that opens up a whole 'nother can of worms.
Now is a very good answer.
Good luck!

 

[Martha]

I don't know about Texas, but in several states if an estate is below a certain dollar amount you can simply transfer assets to an heir via an affidavit. (Says roughly that the person died, when they died, and that you are entitled to the asset because you are the heir) In Wisconsin, the dollar limit is 50,000, in Minnesota, 20,000. I just did it for my uncle in law's "estate."

 

[Martha]

Yup, Texas seems to have a similar procedure:

Texas Estate Planning and Probate Law: Alternatives to Probate Administration for Small Estates in Texas

http://www.co.travis.tx.us/probate/pdfs/small_estate_affidavit_checklist.pdf

http://www.texasprobate.com/forms/

texas small estate affidavit - Google Search

The county where she died might have their own preferred form.

 

[REWahoo]

The account is valued at ~$90K, so apparently isn't eligible for the "probate lite" option...

 

[freebird5825]

Dumb question...is the account value at the time of MIL's passing, or the account value now, that is applicable?

 

[Martha]

The account is valued at ~$90K, so apparently isn't eligible for the "probate lite" option...

Bummer. You are going to have to spring for a lawyer, who likely can be paid from the account.

 

[REWahoo]

I was afraid that would be the case.

Before going that route we have one more source to check. We've been looking at some of the old information in FIL's files on this account. Paperwork prior to 1994 shows both names and "JT Ten" on some of the reports, but more recent paperwork shows indivdual names. Guess we will need to take a look at the actual stock certificates in his bank safe deposit box - a 5 hour round trip drive . Looking at the accounts online doesn't tell us much.

 

[REWahoo]

Dumb question...is the account value at the time of MIL's passing, or the account value now, that is applicable?

Maybe not a dumb question at all, but not much difference in value at that time according to my quick look.

 

[freebird5825]

I was afraid that would be the case.

Before going that route we have one more source to check. We've been looking at some of the old information in FIL's files on this account. Paperwork prior to 1994 shows both names and "JT Ten" on some of the reports, but more recent paperwork shows indivdual names. Guess we will need to take a look at the actual stock certificates in his bank safe deposit box - a 5 hour round trip drive . Looking at the accounts online doesn't tell us much.

If I remember my joint tenancy rules correctly, and I am still arm-chairing here, AND the pre-1994 versus post-1994 records are simply a report format change, this may not be so horrendous as imagined. That may be why probate was able to be skipped in the first place, and the account ownership was never updated.
All I know is when LH passed, JTWROS across the board made everything less of a hassle than without.