Estate Administration Tales – Part 3

In my blog post last week, I was telling you about a call we received from Daughter concerning estate administration for her dad who died without a will.  Her mom was the surviving spouse but her dad had 3 children, one from a previous marriage.  I explained last week that because Dad did not leave a will, under New Jersey intestacy laws only a part of his estate passes to his wife.  

The first 25% but not less than $50,000 or more than $200,000, plus 1/2 of the rest goes to the wife.  When I explained this, Daughter told me that she and her sister wanted her mom to have 100% of the house.  She told me it is worth approximately $750,000.  I then asked what other assets Dad had.  She told me that there was a joint bank account with Mom of about $50,000 and another bank account of $50,000 in Dad’s name alone.

The joint bank account is a right of survivorship account so Mom was entitled to this account by law.  The only assets that pass by way of the intestacy law then would be the home and the other bank account.  Under the intestacy law calculation, Mom would receive $200,000 (1/4 of $800,000) + $300,000 (1/2 of the remaining $600,000) for a total of $500,000.  The 3 children would split the other $300,000, receiving $100,000 each.

Daughter said that she and her sister want to give Mom their $100,000.  I asked about her half sister but she had not spoken to her about it so was unsure.  I explained that if the half sister was unwilling then she could receive the $50,000 from the bank account which would leave her short $50,000 to satisfy her $100,000 inheritance.  In that case Mom could give her $50,000 from the joint account or from other asset she may have.

Seemed like there was a solution either way. – except for one final piece of information that Daughter then told me about.  She said that $50,000 in the individual account in Dad’s name wasn’t really Dad’s money.  How so?  I’ll share that with you next week.