Dear Moneyist, My sister recently passed away, unexpectedly. She was never married and had no children, but there are 4 living siblings. She had 7 retirement accounts. The beneficiary was changed on 6 accounts to her friend back in 2013. The 7th, which has the most money, was changed to this same friend a year ago. In looking at her living conditions it was obvious that she was facing some challenges, both mentally and physically. She has a home and a car. The car is paid off, but not the home. This friend said that the home and car should be handled by the family. Is there a possibility that we — as next of kin — can possibly contest the friend as beneficiary since there was no will? Also, can take possession of the car? Sister Dear Sister, Your sister obviously had a good friend. Without a spouse or children, she or he obviously meant enough to her to be included on all 7 retirement accounts. If your sister was not of sound mind when she changed that final account, you may have a case. However, the fact that the same person was listed on all previous accounts as far back as 2013 suggests that this friendship was real, as was her wish to leave all 7 to her friend. That trail of documents would, I suspect, make a challenge extremely difficult. Given your sister’s physical and mental health, drawing a line between her living conditions and this friendship seems like an equally arduous task. The reasons for contesting a beneficiary are difficult to prove, but not impossible. They are similar to those for challenging a will: mistakes, omissions, forgery, outright fraud or undue influence[1]. The latter would typically involve a sudden change of plan, unusually active involvement of your sister’s friend or secrecy, or even a deteriorating physical or mental condition, according to Albert Goodwin[2], a New York-based estate lawyer. “Fraud can either mean that the beneficiary designation was slipped to the decedent under the guise of a different document, or the decedent signed the beneficiary form relying on lies told to him by the people benefitting,” he writes[3]. Don’t miss: Can I deduct the life-insurance premiums that I pay as alimony? [4] You would have to prove your sister was not of sound mind or “non compos mentis.” According to DiVernieri, DiVernieri and Cotter[5] law firm in Staten Island, N.Y., “The idea of someone being non compos mentis is usually not brought up until after they have passed away. In most cases, doctors will let family members know when someone is not of sound mind anymore so the family can make the proper arrangement.” Sometimes, there are clear cases that something is amiss, as with this case of a man who left his $1 million estate... My late sister named her friend as beneficiary on 7 retirement accounts—can I contest them?
- Category: Economics
Dear Moneyist, My sister recently passed away, unexpectedly. She was never married and had no children, but there are 4 living siblings. She had 7 retirement accounts. The beneficiary was changed on 6 accounts to her friend back in 2013. The 7th, which has the most money, was changed to this same friend a year ago. In looking at her living conditions it was obvious that she was facing some challenges, both mentally and physically. She has a home and a car. The car is paid off, but not the home. This friend said that the home and car should be handled by the family. Is there a possibility that we — as next of kin — can possibly contest the friend as beneficiary since there was no will? Also, can take possession of the car? Sister Dear Sister, Your sister obviously had a good friend. Without a spouse or children, she or he obviously meant enough to her to be included on all 7 retirement accounts. If your sister was not of sound mind when she changed that final account, you may have a case. However, the fact that the same person was listed on all previous accounts as far back as 2013 suggests that this friendship was real, as was her wish to leave all 7 to her friend. That trail of documents would, I suspect, make a challenge extremely difficult. Given your sister’s physical and mental health, drawing a line between her living conditions and this friendship seems like an equally arduous task. The reasons for contesting a beneficiary are difficult to prove, but not impossible. They are similar to those for challenging a will: mistakes, omissions, forgery, outright fraud or undue influence[1]. The latter would typically involve a sudden change of plan, unusually active involvement of your sister’s friend or secrecy, or even a deteriorating physical or mental condition, according to Albert Goodwin[2], a New York-based estate lawyer. “Fraud can either mean that the beneficiary designation was slipped to the decedent under the guise of a different document, or the decedent signed the beneficiary form relying on lies told to him by the people benefitting,” he writes[3]. Don’t miss: Can I deduct the life-insurance premiums that I pay as alimony? [4] You would have to prove your sister was not of sound mind or “non compos mentis.” According to DiVernieri, DiVernieri and Cotter[5] law firm in Staten Island, N.Y., “The idea of someone being non compos mentis is usually not brought up until after they have passed away. In most cases, doctors will let family members know when someone is not of sound mind anymore so the family can make the proper arrangement.” Sometimes, there are clear cases that something is amiss, as with this case of a man who left his $1 million estate...