Dear Quentin,
Months before my mother transitioned, she told me there was a substantial inheritance coming to me and my sons. She highlighted a few things that she wanted me to do for my kids, etc. She never said how I’d receive this inheritance. I’m guessing it was her 401(k) plan, but I trusted that I would know when she passed away.
My mother entrusted her finances to her husband of 30 years before she passed from pancreatic cancer. I didn’t breach the subject immediately after her passing, but 18 months went by and there was no reading of a will or discussion brought up. I brought up the subject of our inheritance and an argument ensued.
It’s been years now with no contact with my stepfather. I eventually got a copy of the will with no specific reference to me or my sister. But the attorney did say that it would be illegal for my stepfather to get those funds and not share them with my sister and I as we are her only legal heirs besides him. Note my stepfather has no children.
Unclaimed 401(k)
Over the last few years, my mother’s bank did contact me regarding the unclaimed 401(k) and stated that it should go to her husband as there’s no listed beneficiary on the document. They didn’t discuss anything else. I gave them his information. He was so prudent in tying up financial matters when she passed. I don’t know why he left this matter unresolved.
I decided not to pursue legal action. What’s hurtful is that my sons could have benefited from some of the funds and are now college age. I’m applying for scholarships daily and this is a hurtful reminder that the money is already in-hand — his hands. Lastly, he is a managing director at a major bank and probably clears $800,000 per annum.
My sister has a very modest income and I do fairly well. What do you think I should do?
Bereaved and Bereft
Dear Bereft,
You face a two-headed monster: one legal and one ethical/emotional.
Let’s deal with the former first: the complicated and expensive legal fight, if you choose it. If you and your sister were not mentioned in the will, there was a window of opportunity to contest it and argue that your mother simply neglected to mention you. (If there was no will, her estate would be distributed based on the law of intestacy in your state.)
There appears to be a misunderstanding with your attorney. If there was no will, you would likely receive a portion of the separate property (acquired prior to your mother’s marriage and/or any inheritance received during your mother’s marriage that was not commingled with marital funds). But unless the will was fraudulent or contained errors, it would likely stand.
Of course, you could contest the will, but you would need to take legal action before the statute of limitations runs out. That varies by state. In Texas, there is a two-year statute of limitations to contest it after probate. There is a three-month statute of limitations to contest a will in Florida, which can be extended if there was fraud, misrepresentations or misconduct.
As possible heirs/beneficiaries, you and your sister are classified as “interested persons” and, as such, you would have the right to contest your mother’s will, assuming the statute of limitations has not run out. The 401(k) beneficiary, as with all accounts with listed beneficiaries, is not included in probate. If there’s no beneficiary listed, it would go to your stepfather.
Unanswered questions
And now to the ethical/emotional part of your letter: Why did your mother not mention you in her will? Why did your stepfather fail to claim her 401(k) if she was listed as a beneficiary? Why did your mother not add you and your sister to any of her accounts? These are all frustrating and painful conundrums. Nobody likes to be left with a question, let alone three or more.
Sometimes, the answers are far less satisfactory than we would hope. Rather than malice or conspiracy, people often fall victim to disorganization, a lack of legal/financial literacy or, indeed, the persuasion and promises of a third party (your stepfather, in this case). An elderly parent whose health is failing may even wait too late to write a will or even fail to update it.
Some parents might set up a nonmarital trust. “You can establish a nonmarital trust to provide your surviving spouse with income for the remainder of his/her life and, upon his/her death, the trust will terminate and the corpus and all undistributed income transferred to your children and/or named beneficiaries,” says Hanlon, Niemann & Wright, a law firm in Freehold, N.J.
Your mother may have indeed trusted your stepfather to do, as she saw it, the right thing by distributing funds to her children after she died. Rarely do stepparents — in the annals of this column, anyway — acquiesce to a generosity of spirit or diligently abide by their late spouse’s wishes. That’s why estate planning is all the more important for blended families.
I think you should kiss your stepfather goodbye and move on with your life.
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.
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