Does the Caregiver Get to Keep the Money?

A loving caregiver or a gold digger?

The situation: In 2013, Frank A. (names have been changed to preserve confidentiality), a former theater stagehand, died at age 92. His will, drafted two years earlier, created a special needs trust for his son, Robbie, who was in a nursing home following a stroke. Robbie died shortly after his father, and the remainder of the estate — nearly $4 million — was left to Frank’s second cousins under his will. At the time of Robbie’s passing, however, his cousins were “surprised” to learn of a gift Frank had made to a family friend, Jane B., in the form of unsigned stock certificates valued in excess of $2 million. According to Jane, Frank called her to his house one evening in 2012 and handed her an envelope, saying, “I want you to have this.” Jane, who had known Frank and Robbie since she was a child (at one point, Frank had offered to adopt Jane), put the envelope away. After Frank died, she notified the estate attorney about the certificates and they were transferred to her name.

The case: Frank’s cousins filed the case in probate court on the basis of “unjust enrichment and undue influence” by Jane, which resulted in the gift. The cousins alleged fraud, deceit and misrepresentation. In her defense, Jane testified she’d befriended Frank and Robbie when she was 7 years old and had remained friends ever since, even making numerous long-distance trips to care for them both near the end of their lives. The cousins countered that Frank, a sophisticated investor, had not mentioned the gift or Jane in his will. Jane’s team responded that the stocks were freely given to her as a gift, independent of the will.

And the Verdict is...

Jane

The cousins made a compelling case, arguing that there was no valid delivery of the stocks to Jane — Why hadn’t Frank mentioned this to his broker or lawyer, for instance? — and that a savvy investor such as Frank would have been shrewder about the transfer. But the court concluded that Frank intentionally gave the gift in appreciation of Jane’s friendship and service to his family (which was corroborated by witnesses). The case also revealed that Jane was not financially sophisticated and had never opened the envelope until after Frank died. With the court’s favorable ruling, she got to keep the stocks and her dignity.

The lesson: “When it comes to passing along assets, even with smaller estates, put things in writing as clearly as possible and make your wishes expressly known, to reduce the possibility of misunderstandings and conflict after one’s death,” says Jane’s attorney, Richard Miller. “Communication won’t eliminate the risk of disputes, but it significantly increases the likelihood of your wishes coming to pass.”

The Next Case:

Generous kin or addled aunt?