Today's Question: "MY BROTHER AND I FARMED WITH OUR FATHER ALL OUR LIVES, AND MY BROTHER AND I ARE STILL FARMING THE LAND. AFTER DAD MOVED INTO TOWN, HE MARRIED AGAIN. HE DID A WILL TO LEAVE THE FARM TO MY BROTHER AND ME, AND PROVIDED FOR HIS WIFE FROM OTHER SOURCES, INCLUDING THE CASH RENT WE PAY FOR THE FARM. AND THEY ALWAYS TALKED ABOUT THE FARM BEING OURS WHEN HE WOULD PASS AWAY. AFTER HIS RECENT DEATH, WE LEARNED THAT SHE HAD USED A POWER OF ATTORNEY DAD GAVE HER, AND TRANSFERRED THE LAND INTO HER NAME BEFORE HIS DEATH. WHAT CAN WE DO?"
Karen McBride from Schweigert, Klemin & McBride, P.C. says, "Definitely consult with a lawyer immediately. There are not a lot of facts here, but enough to give at least a general answer. This was obviously a big shock for them, and they need this resolved."
So, this is something she could do with a power of attorney?
"Very possibly, depending on the language of the document, she possibly could. Surprisingly, there is not a lot of case law on this type of thing. But, a person who is given a power of attorney, like this step mom, is viewed by the law as being a "trustee" for the person who gave her the document." says McBride.
What does that mean?
"Typically, it would mean that she's supposed to use the power of attorney only in the dad's best interests." says McBride, "On the few facts here, it's hard to see how wiping out the intent of his Will could be construed as being in Dad's best interest. But there can be exceptions. Which is why they need to get to a good lawyer ASAP."
What sort of exceptions?
McBride says, "The actual language of the Power-of-Attorney might permit her to do things that would change his estate plan without his consent. The POA's I draft don't usually directly permit that. But I've seen some that did give that power to the POA agent. And there's a statute that permits documents to include that power. So they need to see the POA itself and have an attorney review it. The language is going to govern. Or there are sometimes circumstances where she might be advised that she needs to put Dad's property into her name. It's not always as sinister as this sounds, in other words."
What kinds of things are we talking about?
"One possible example would be, if Dad went into a nursing home and couldn't be completely self-pay, even with the cash rent. In that situation, the social worker might advise putting some assets into step mom's name as the "non-institutionalized spouse". There's a certain level of assets that a spouse who isn't in the nursing home can keep, and still qualify Dad for medical assistance. So my first question might be whether they have tried to talk to their step mom to work this out." says McBride.
And if they haven't tried to talk to her?
"First step obviously is to talk to her." says McBride, "Preferably directly, if their relationship with her has previously been friendly. Or, have their lawyer make the approach."
And if she's not cooperative, that's when they need to do other checking as to how this happened?
"Correct." says McBride. "If the land title transfer wasn't made to facilitate Dad being able to stay in the nursing home on medical assistance, it does sound a bit as though the step mom may have been trying to defeat Dad's estate plan and take the property for herself. If so, there might be a decent argument for setting that transfer aside and getting the land returned to Dad's estate, to be distributed under the terms of his Will. She could still receive the land rent, since that seems to have been the intent, but then she couldn't leave Dad's land to her own kids. That's the big worry I would have here if I were these sons. Depends a lot on what powers the power of attorney document gave her. And maybe could depend somewhat on what Dad's mental status was at the time he signed it. Lots of potential complexities involved, in other words."
Is this a situation where they could wait a bit to see what happens?
"We don't know when these things took place." says McBride, "If it's very recent, the step mom may still be planning to fix the situation. But I would recommend seeing someone quickly. Can be short deadlines for making these kinds of claims, so get to an attorney sooner rather than later. The Step mom probably breached what the law calls a "fiduciary obligation" to Dad, if this transfer wasn't somehow made to benefit him (like the nursing home/medical assistance situation I mentioned). Or she maybe has committed what the law calls "conversion," where she essentially took and used someone else's property. So the legal theories that spring to mind are breach of fiduciary duty, and conversion; there may be other theories that apply. Whatever happened, they need to look into it, and I recommend they do so fairly quickly."
You've mentioned before that spouses aren't permitted to completely disinherit each other unless there is a premarital agreement not to claim each other's estates. Do you think that would figure into this question?
"Nowhere near enough facts here to know for sure the sons' claim could run up against the principle that spouses can't completely disinherit each other. But in this case they say that Dad provided for her in other ways, so that might not be an issue the way it otherwise could be. Someone needs to be retained to dig for all the facts and pursue whatever legal remedies might be available, if they can't reach an agreement with her." says McBride.
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