"My father died and left the house he lived in to his wife, my stepmother... My father told me the house would be mine and that he had life insurance to pay it off if anything happened to him."
-NORTH JERSEY.COM (OCT. 17 2010): INHERITING PROPERTY FOLLOWS SIMPLE RULE: PUT IT IN WRITING (http://www.northjersey.com/realestate/105124109_Inheriting_property_follows_simple_rule__Put_it_in_writing.html)
I wish it weren’t true, but the above scenario is one that is played out all-too-often within families. The writer in this particular instance says she had been paying the mortgage, insurance, homeowners’ association dues and taxes on her father’s house for the past ten years, with the (apparently verbal) promise that the house would be hers when he passed. However, it appears that the house was left to her father’s wife, this woman’s stepmother. She wonders now what recourse she may have. (Read the entire story online NorthJersey.com)
When it comes to real estate, a gift of any current or future interest should be made in writing, and memorialized with the appropriate legal documents (a will, trust, deed, etc.). In the absence of legal evidence to support this woman’s claim, it is very possible that she is simply out of luck. She may be able to recoup some of her money by filing a claim against the estate, but even that is not a sure bet (and even if she is successful, she likely won't recover all she has paid).
If you have an “informal” arrangement with family members regarding real estate, or other estate assets, I would encourage you to “formalize” it with the appropriate legal documentation sooner, rather than later. Certainly before the financial stakes are as high as they became for the woman in the NorthJersey article. A basic revocable trust and beneficiary designations could have resolved the concerns raised by the woman in the NorthJersey article.
Visit our website to learn more about fundamental estate planning, such as wills, revocable trusts, insurance trusts, and powers of attorney. If estate and gift taxes a a concern, we offer free inforamtion on those topics as well. And finally, if you find yourself in a situation simlar to the woman in the article, we offer assistance in estate and trust administration (including estate and trust contests and dispute resolution).