Niece and Half-Brother Tussle over the Aunt’s House….

Dear Mr. Miller:

I have inherited a house from my Aunt.   The house is in the California Central Valley and is worth about $700,000.   My Aunt also had bank accounts of $300,000 and securities of $400,000.  Several months before she died, she gave me a copy of the deed to the house.  It was titled in her name and mine.  The bank accounts and securities were titled in her Trust.  The Trust leaves everything to my half brother who is also the Successor Trustee of that Trust.

All well and good except here is the problem.  The Trust specifically indicates that the house goes to my half brother so he thinks he is entitled to it and not me.  He and I have never gotten along.  He is threatening to get a court order to move me out.  My Aunt told me several times she wanted me to get the house so I am sure that was her intent.  I don’t have any other money so I need that house in order to have a place to live!  Am I to be evicted?

Pending Eviction Niece

Using Will Substitutes Incorrectly
Joint Tenancy vs Tenancy-in-Common
Joint Tenancy vs Trust Conflicts
Why Using an Attorney Can Actually be Less Expensive
Call us

Dear Pending:

Using Will Substitutes Incorrectly:  When decedents leave their assets by different means it can sometimes create nightmares.   I always tell my clients, if you have a Living Trust you have already paid for the vehicle—now use it!  In other words, have everything (subject to a few exception) flow through that vehicle (the Trust) and describe who gets what rather than some goes by the Trust, some goes by a “pay on death” bank account, some goes by a joint title on a house.  Unfortunately, your Aunt never asked me.  So here we are!

Joint Tenancy vs Tenancy-in-Common:  I assume you have looked at the last deed on the house and made sure that that is the last deed and that there was nothing recorded later.  A helpful real estate broker or attorney can contact a local title insurance company and determine that. If what you have is the last deed, then we need to determine if you and your Aunt held title as Tenants-in-Common or Joint Tenancy.  If the latter, the deed will specifically say so, if it doesn’t, then it is Tenants-in-Common.  With Joint Tenancy, the survivor (you) already have title to your half and automatically receive the decedent’s (your Aunt’s) one-half ownership.  In other words, you wind up with 100%.   If Tenants -in-Common, then you keep your one half interest but your Aunt’s one-half typically goes by her Will or Trust–in this case apparently to your half-brother.  So you can see that which form of title the deed created is critical in this case.

Joint Tenancy vs Trust Conflicts:  Now for the conflict between the Deed and the Trust.  If it was Tenancy-in-Common there is no conflict and your step-brother and you are probably co-owners–and that creates a whole other bag of worms.  If it was Joint Tenancy, you would own 100% but then there is a conflict. But here’s the good news; the Joint Tenancy deed typically takes precedence over the Trust.  You need a lawyer to look this over—now!

Why Using an Attorney Can Actually be Less Expensive:  I don’t know if your Aunt did her estate planning herself or had the Trust done by a lawyer and then did the Deed herself later.  In either case, the moral of the story here is that it is important to use an attorney.  And not just any attorney but a knowledgeable and experienced one.  No attorney I know would have let this occur.  On the other hand, newbies and attorneys who specialize in a different field and are doing you a favor by preparing your Trust might.  Sure, sometimes for simplicity or tax reasons we’ll let a $10,000 bank account be”pay on death” to a grandchild rather than go through the Trust and we typically have specified beneficiaries for IRAs, but $700,000 houses are a whole different ball game.

Call us:  Give us a call at 760-436-8832 so we can catch errors like this (or many others) in your estate plan and avoid disastrous conflicts–ultimately saving your family from spending the inheritance on litigation lawyers and heartache.