“I wrote him a check for $5,000 15 years ago because my mother would have died on the spot if she had been evicted from her home.”
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My mother’s will states that her home is to be sold and the money divided — with half going to her two children and the other half to her late husband’s nieces. Mom now feels the nieces don’t deserve the money because they never helped or even visited her husband, their uncle.
But she has yet to change her will to reflect those feelings. After a stroke, she moved in with me and sold her house, with the money from the sale going into her savings to pay for her care. My brother and I are on both her bank accounts.
Upon her death, can the nieces demand half of the proceeds from the house sale? What if she’s used the money for her own care? Would we be responsible for covering that amount? Your answer will help me convince mom that it’s time to get the will to reflect her wishes.
Daughter
“Generally, legitimate ‘interested parties’ have the right to challenge a will. They could be relatives and, yes, people who are mentioned in the will.”
MarketWatch illustration
Dear Daughter,
Your mother effectively made her decision when she sold the house and used the proceeds for her care. Her late husband’s nieces are not direct heirs and, if she died without leaving a will, her entire estate would go to her next of kin — her two children, you and your sibling.
However, legitimate “interested parties” have the right to challenge a will. They could be relatives and, yes, people who are mentioned in the will. In an ideal world, executors should keep beneficiaries informed of changes to the will in question. In this case, of course, your mother is very much alive.
Neil V. Carbone, a partner at Farrell Fritz, P.C., quotes a simple adage to sum up your predicament: “As the saying goes, ‘You can’t give what you don’t have,’” he says. Your mother said she would leave her home to four people, but she sold that home during her lifetime.
“The question here is whether the legal doctrine of ‘ademption’ applies,” he says. “In general, when a decedent includes a specific bequest of property under his or her will but no longer owns that property at the time of death, the bequest ‘adeems’ or lapses.”
“In effect, the decedent revoked the gift by disposing of the property during his or her lifetime. Here, because mom sold the house herself, according to the facts presented, the direction in her will to sell it and divide the sale proceeds is rendered ineffective and the bequest adeems.”
But there are exceptions to the doctrine of ademption in New York, he says. “One exception applies when property is sold by the guardian or conservator of an incapacitated person. In that case, the beneficiary would be entitled to receive the traceable proceeds of sale.”
As more people use a durable power of attorney to avoid the expenses related to guardianship, Carbone adds, more cases of wills being challenged in court have arisen seeking to extend this exemption to agents acting under such a power of attorney.
In other words, her husband’s nieces could claim that your mother was not competent at the time of the house sale and that they should therefore receive what they believe is their fair share of the proceeds. That could be a time-consuming and expensive process.
It’s smart to update a will as circumstances and feelings change. While your mother can’t leave what she no longer owns, there could be a loose end or two that might motivate these nieces to take action. Where there’s a will, there’s a relative. You mother should change the will, and keep things simple.
More from Quentin Fottrell:
My mother’s late husband came with baggage — ‘his deadbeat son.’ Is she on the hook for his debts? Can she evict him from her home?
On the day my stepfather died of brain cancer, he changed his trust and left everything to my sister. Do I have any recourse?
My husband and I are in our 70s. We married 3 years ago. He’s leaving his $1.8 million home to a 10-year-old relative. Is that normal?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter. The Moneyist regrets he cannot reply to questions individually.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, or weigh in on the latest Moneyist columns.
By emailing your questions to the Moneyist or posting your dilemmas on the Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.
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I read and hear so much about adult siblings who always got along, but suddenly start fighting among themselves when they are about to inherit their parents’ estate. I didn’t see how this could happen to my family — until now. We’re not at that point, but things are getting tense.
I am the middle child of three. My older sister and I are in our 70s, and my brother is in his early 60s. Our parents were not wealthy, but they were able to sell their farm 10 years ago, and the proceeds have enabled them to comfortably cover all medical, assisted-living and long-term-care costs.
Our parents always told the three of us that they never wanted to be a financial burden to us kids, and that they wanted whatever might remain when they died to be divided among us equally. Their wills indicate that. Dad has since died, and Mom is at a very advanced age.
All three of us are married, and none of us has any children or heirs. I am retired and debt-free. My sister is in a similar situation. Neither of us is wealthy, but we feel financially secure.
My brother’s financial problems
We don’t discuss our personal financial details with one another, so I was shocked to learn about my brother’s situation. Five years ago, he was laid off from his job. It was just one of those corporate moves, and not anything performance-related.
The worst part is that he was in no hurry to get another job. He was very picky about location, salary and similarity to the type of work he had previously done — always holding out to get exactly what he wanted, and unwilling to settle for less.
He would not even consider a lower-paying job temporarily just to pay the bills, or one that might require relocation or a longer commute. In time, he became “long-term unemployed,” so it was even harder to be considered for a job. This went on and on.
After a few months, he started asking our mother for cash — large sums, $10,000 at a time, repeatedly. I manage my mother’s finances, but I have always treated it as her money and not mine to spend or control. If she wants to give him money, she gives him money.
In total, my mother gave my brother $200,000
While I have advised her that these gifts are not wise, she says she just wants to help him. To date, she has given him nearly $200,000. She did agree to pause this when I informed her that if she did not, she would at some point run out of money for her own needs.
He is now broke, deeper in debt than ever and still out of a job. All the money she has given him is gone. It’s clear to me he is in a terrible financial situation and is hoping his inheritance will bail him out.
The thing is, there won’t be much inheritance for anyone, at the rate he’s going. He has owned his home for 32 years, but he has a current mortgage balance of more than triple his purchase price. His credit-card debt is astonishingly high. He has emptied his retirement account.
He had a six-figure salary, but he has been out of work four of the past five years, and this only tops off the fact that he has been living beyond his means for many years. While he doesn’t have a drug or alcohol or gambling addiction, it seems he has a spending or lifestyle addiction.
Taking advantage of our mother’s sympathy
I love my brother and I do want what is best for him, but I fear the financial hole he has gotten himself into is so deep he will never recover, let alone have any kind of retirement. In the meantime, he has taken advantage of our mother’s sympathy and financial resources.
This is where it gets sticky. My mother likely won’t live much longer. Am I being selfish to expect a third of what would have remained had my brother not taken all this cash from her? Technically, he didn’t steal it, since she gave it to him.
I don’t really need that inheritance, as I’ve lived my life without the expectation of inheriting anything. But my sister and I feel that we’re being cheated out of something just because we’ve managed our finances responsibly.
At one point several years ago, we three kids discussed this and agreed that we would just reconcile the gift giving when settling our mother’s estate, and just count what he has already received as part of his inheritance. This is not specified in her will.
Is there any way to patch up this situation before it goes off the rails?
Concerned Sister and Daughter
Also see: ‘Low-paying jobs are the economy’s way of saying you should get a better job’: I’ve decided to stop tipping, except at restaurants. Am I wrong?
“You need a wake-up call as a family. The time for standing by and ‘normalizing’ his behavior by complaining about it after the fact is over.”
MarketWatch illustration
Dear Concerned,
It has already gone off the rails.
It’s time to spend less time thinking about your brother’s financial situation and his reasons for doing what he does — which could be related to a family dynamic that is hard to break — and more time focusing on your mother’s long-term-care needs and finances, and how long the money will last.
Your brother will continue to put his priorities first. He is a master manipulator, whether or not he recognizes it in himself and whether or not he has malicious intent, so your mother needs to see her assets in their entirety and an illustration of what percentage has been given and now spent.
You need a wake-up call as a family. The time for standing by and normalizing his behavior by complaining about it after the fact is over. Arranging a family meeting with an attorney, and putting your mother’s finances on paper, is a start. How much money has she set aside for an emergency fund?
Undue influence, duress or pressure on an individual who lacks mental capacity could constitute elder abuse. First, it’s a favor here and a favor there — a little money to tide a sibling over; a tale that pulls at the heartstrings. Next, it’s large checks, clothing, jewelry and expensive artworks.
Writing a will that takes this $200,000 into account
Another lesson for your mother (and everyone else): A will should be updated every year or two, and your mother’s attorney and/or whoever has power of attorney should advise her to deduct the $200,000 she has given to your brother from his remaining inheritance.
There are several reasons: The money he has been given is now gone, so there is no point in throwing good money after bad; enabling your brother by giving him preferential treatment has only led to more requests; and it’s fair and equitable to treat these gifts as inheritance.
As your mother grows more frail and vulnerable, your brother may see her bank account as a last-chance saloon to bolster his dwindling finances. One of the hallmarks of elder financial abuse is isolation, but you can help prevent this with some simple measures.
If your mother has at-home caregivers, you can ask them to keep you in the loop on visits or requests by family members, and you can — and probably should — add yourself as a cosigner on your mother’s bank accounts so your brother will need to go through you for future requests.
Financial elder abuse is vastly underreported
The National Center on Elder Abuse, a government agency affiliated with the U.S. Administration on Aging, and the nonprofit National Adult Protective Services Association both have resources that can guide you through the steps for reporting any alleged abuse.
Given the amount of money involved, this situation could get worse before it gets better. Elder abuse affects an estimated 5 million Americans annually, according to the National Council on Aging, and multiple agencies say that number is both increasing and underreported.
Studies show that seniors lose $2.6 billion a year due to elder financial abuse — and possibly a lot more, according to one estimate that only one in 44 cases is actually reported. NAPSA says victims of elder abuse are three times more likely to die compared with non-victims.
Elder abuse can happen slowly and with great manipulation. Your mother could be under some kind of undue influence or duress, even if she doesn’t see it that way herself. The fact that it’s been going on for so long, and has led to her giving away such a large amount of money, is concerning.
Start the ball rolling on that family meeting.
More from Quentin Fottrell:
I want my brother to inherit my estate. I’ve three other siblings. Do I need an attorney? What could go wrong?
I don’t want to leave my financially irresponsible daughter my house. Is that unreasonable?
My father has dementia and ‘forgave’ my brother’s $200,000 house loan. The nursing-home notary said he was of sound mind. What can we do?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter. The Moneyist regrets he cannot reply to questions individually.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, or weigh in on the latest Moneyist columns.
By emailing your questions to the Moneyist or posting your dilemmas on the Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.
By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
About one in five new mothers say they’ve delayed or forgone needed healthcare within the first year after giving birth — which is the riskiest period for maternal health — according to new research published today in the journal Health Affairs.
That pattern was relatively consistent regardless of whether the new moms had commercial insurance or Medicaid, according to the study by researchers at Columbia University and Cornell University. Compared with people with commercial insurance, however, people on Medicaid were less likely to have a usual source of care and made significantly less use of primary, specialty and dental care in the postpartum year, the study found.
The study — the first large-scale, representative survey of postpartum health ever conducted in the U.S., according to Columbia’s Mailman School of Public Health — comes amid growing concern about pregnancy-related deaths. About 33 women died of maternal causes for every 100,000 live births in the U.S. in 2021, up from about 20 per 100,000 in 2019, according to the Centers for Disease Control and Prevention.
“The postpartum period has been really overlooked,” said Jamie Daw, an assistant professor of health policy and management at Columbia’s Mailman School and the lead author of the study. Yet more than half of pregnancy-related deaths between 2011 and 2015 occurred during the year after giving birth, and nearly two-thirds of those deaths would have been preventable with proper medical intervention, according to CDC research. Major health concerns during that period include heart conditions, mental health and substance use, Daw said.
Medicaid plays a critical role in maternal health, covering about 40% of births in the U.S., but under federal law, states are only required to provide pregnancy-related Medicaid coverage for 60 days after the birth. Thirty-nine states and Washington, D.C., have taken advantage of a new option under the American Rescue Plan Act of 2021 to extend Medicaid coverage for new mothers to 12 months after giving birth, according to KFF, a health-policy research nonprofit.
But Medicaid coverage alone isn’t enough to ensure maternal health, according to the new Health Affairs study, which is based on a survey conducted between early 2021 and spring 2022 of new mothers in six states — Kansas, Michigan, New Jersey, Pennsylvania, Virginia and Utah — and in New York City.
Compared with new mothers with commercial health coverage, new mothers on Medicaid were nearly twice as likely to report not having a usual source of care, such as a primary-care doctor, and to not fill prescriptions or take medications as prescribed because of the cost, the study found. People on Medicaid were also less likely to have a postpartum doctor visit or to see a lactation consultant and were more likely to report an emergency-room visit, according to the study.
People surveyed often skipped needed care during the postpartum year because they didn’t have child care or leave from work or school, Daw said.
While commercially insured patients in the survey fared better than those on Medicaid, their level of care was far from ideal, Daw said. Only 56% of people with commercial insurance, for example, had a primary-care visit in the year after giving birth. That’s higher than the 46% of people on Medicaid who had a primary-care visit in that year, but “you’d hope that everybody would get a well-woman visit,” Daw said. Similarly, only 52% of the commercially insured patients and 25% of people on Medicaid had any dental care in the year after giving birth.
Many people seem to get lost in the transition away from prenatal care, Daw said. Even for people who get lots of prenatal care and are well-connected to an ob-gyn, she said, “there’s not a good transfer after birth to other primary-care providers. You have a postpartum visit, and it ends, and people get lost in reconnecting to the healthcare system.”
In addition to extending health coverage in the postpartum year, states need to focus on connecting new mothers with social services to address needs that can affect their health, Daw said. More than 20% of the Medicaid recipients surveyed, for example, reported food insecurity, compared with 5% of the commercially insured.
Because of the survey’s timing, the results don’t reflect the impact of increased state abortion restrictions that have followed the U.S. Supreme Court’s 2022 decision overturning the constitutional right to abortion. The researchers will be looking at those effects when they repeat the survey to follow 2024 births, Daw said.
Dear Quentin,
We are three siblings: my brother, my sister and I. Our mom passed away from a stroke in Arizona. Her estate went to probate court as she had no will. We were all on the same page and had no issues getting everything done. Her house was sold very quickly for $420,000. There was $20,000 left in her bank account after paying off her credit cards.
“‘My brother has five kids and my sister has three children. I have no children, so they know they are in the wrong.’”
I assumed we were splitting everything three ways. But then my sister in-law informed me that the grandchildren deserve a share. My brother has five kids and my sister has three children. I have no children, so they know they are in the wrong, and they’ve stopped all communication with me. They are stating I should (or will) get $58,000 from my mother’s estate or nothing.
I want to make this right. Should I just take the money?
Brother, Uncle, Son
Dear Brother,
It’s a classic 11th-hour twist.
The law is on your side. Under Arizona’s intestate law — when someone dies without a will — the spouse of a deceased person will inherit everything, even if there are children. If there are children but no spouse, the children will inherit everything. The law does not mention grandchildren, but if there were no children living, grandchildren would be next in line to inherit.
Your siblings are leveraging their relationship with you and your access to their children as a way to force you to reduce your inheritance from $147,000 to $58,000. They are putting a price on those good relations continuing, and that price is $89,000. It’s unfair and unethical to force you to share your inheritance with their children. The eight grandchildren should inherit from their parents, not from you.
“The rules for intestate inheritance only apply to estate assets, assets that are subject to probate,” according to Berk Law Group in Scottsdale, Ariz. “Stated differently, the rules do not apply to nonprobate assets or trust assets. So, before discussing ‘who gets what’ from an intestate estate, we need to define the ‘what.’ What assets make up the intestate estate?”
“I don’t believe that acquiescing to your siblings’ demands will turn this toxic situation into a healthy one.”
Nonprobate assets include those owned as joint tenancy with right of survivorship or bank, investment or life-insurance accounts where there is a listed beneficiary. “Unbeknownst to many, in Arizona, bank accounts that are owned by two or more individuals are automatically deemed to be joint tenancy with right of survivorship,” the law firm adds.
Of course, the irony is that — should you never have children and should you also die intestate — these nieces and nephews would inherit your estate, either indirectly by inheriting it from their parents who would inherit your estate, or directly if your siblings die before you. So by isolating you now, they risk provoking you into making a will disinheriting all of them.
Follow your gut. Do what you genuinely believe is the right thing and not what you feel pressured into doing. Sometimes when we listen quietly, the answer finds us. Pay attention to how the two options make you feel in the pit of your stomach. For what it’s worth, I don’t believe that acquiescing to your siblings’ demands will turn this toxic situation into a healthy one.
They are who they are — and $89,000 won’t change that.
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
More from Quentin Fottrell:
Am I cheap?’ I used to give my nieces and nephews $100 gift cards, but I left my job in tech for a stress-free life. Is $25 insulting?
‘How to travel for free’: I spent $500 hosting my friend for a week. Should she have paid for food and utilities?
‘He’s content living paycheck to paycheck’: My husband won’t work or get a driver’s license. Now things have gotten even worse.
Dear MarketWatch,
Before I married my wife, she took out a mortgage on a home in El Paso, Texas so she and her mom could live in it.
After we married, my mother-in-law stayed at the property and made the mortgage payments. She’s not in good health and my wife wants to sell the property. We never profited from the property as I considered it her mom’s home.
The home was purchased for $75,000 in 2005, but it was never kept up and it’s been neglected. I’m even afraid to walk in and see the mess. It’s in the process of being vacated and cleaned. A local realtor said they can probably sell it for $160,000.
The home is in my wife’s name. The home is not listed in a trust.
Will we be responsible for capital-gains tax? If so, what options do we have to avoid it? Thanks for your insight.
Taxes in Texas
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
Dear Taxes,
You have multiple options to explore, assuming you have come to an arrangement with your mother-in-law and her long-term care after she moves out. If the house does sell for as much as the real-estate agent says, you’re looking at a gain of $85,000.
If you want to avoid capital-gains tax on the sale of your mother-in-law’s home, the first and most straightforward option: You bite the bullet and live in the home, and not pay the tax man a single cent.
I know it may be an annoyance, but if you live in the house for at least two years, your gains won’t be taxed under existing rules. The Internal Revenue Service says that if you’re married and file taxes jointly, you can exclude up to $500,000 of capital gains on real estate.
According to the MarketWatch Tax Guy column: “To qualify for the larger $500,000 joint-filer gain exclusion, at least one spouse must pass the ownership test and both spouses must pass the use test. When only one spouse passes both tests, the maximum gain exclusion is only $250,000. However, if you and your spouse own two houses, you can each potentially separate $250,000 exclusions.”
Not interested in moving in? You can also consider renovating the property and renting it out. Calculate the projected rental income and see if it covers all the expenses you take on to renovate the home, and also see if it adds some additional income to the family.
“It may be worth a discussion to better understand the economics of renting the home,” Matt Sotir, a financial professional with Equitable Advisors, told MarketWatch.
Not interested in renting either? Then you can also consider a 1031 exchange, if it was treated as an investment property and it qualifies. Talk to your real-estate agent and see if this applies, and if it does, you can exchange the property under the 1031 rules, Sotir said. In other words, you can sell the property and use the money to purchase a “like kind” property, he said. And “given the amount of the gain, it may be a complex way to avoid a modest tax,” he added.
But if you just want to get rid of the home as soon as possible, you can likely lower your tax bill simply by including the costs you bore to fix it up. Keep track of all the money you’re spending on the home, if you’re choosing to clean up, repair and/or remodel it.
You can list those costs when you file your taxes, and that may cut (but not defer or completely eliminate) your overall capital-gains tax, because you can subtract these costs from your sales price. Consult a real-estate agent on whether this route makes sense for you.
But a word of caution. Don’t be obsessed with trying to avoid paying the tax man, and then holding onto the home for longer than you want.
“Sometimes, after exploring all options to reduce these taxes, some tax will have to be paid,” Sotir said. “If the house needs to be sold, try to limit the tax liability to the maximum extent possible.”
But he agrees that you should sell the house, if that’s what you all want, “and don’t let the fear of a modest tax stop you.”
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.