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RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 41043
Experience:  Texas lawyer for 30 years in Estate law
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Again.I have a question regarding beneficiary's gift

Customer Question

Hello again.
I have a question regarding beneficiary's gift of expected inheritance.
A testamentary Trust was created May 15, 1999. It designated the Trustee as the sole beneficiary of the Trust. The Trustee died on October 29, 2005. The Trust instrument stated all remaining trust assets were to be distributed equally to 5 beneficiaries upon the Trustee's death.
Back to May 21, 1999...One of the five beneficiaries made a gift of his expected inheritance of 20% share in a trust property, to another beneficary. In the presence of the Trustee and affected beneficiary, the brother provided a hand written note that was approved by the Trustee on the spot. The note reads " I hereby give all of my control/or interest in the __ House to my beloved sister ___" Best of Love, ____.
On June 15, 2000, All future beneficiaries were notified of a contract for purchase of the same property between the Trust and the "beloved sister". All beneficiaries approved this contract which was then signed by the Trustee and the "beloved sister". Fast forward to October 28, 2011. At a meeting of the 5 beneficiaries, the "beloved sister" produced the hand written note from her brother in 1999. She instructed all to inspect the note, and verified what it meant. She then asked the brother if he still wished to honor this note. He affirmed, and the other 4 beneficiaries agreed.
The Trust has not been distributed to date, and is in litigation because breach and failure to distribute.
The "beloved sister" claims she a 40% reduction should be applied to her contract from October 29, 2005 to date giving her credit for her portion and the brother's portion of interest in the inherited property. When this is applied, the contract for purchase would be considered satisfied as of October 15, 2011, with an overpayment of $7400. The "beloved sister" was never informed of her rights as a beneficiary regarding options how the agreement and her own interest would be applied to her contract for purchase. Now, the "beloved sister" is the Plaintiff in litigation against the Trust and the brother denies the gift and states he was in the care of a psychiatrist and under the influence of alcohol when the "gift" was made.
Is the "beloved sister's" claim valid?
Thanks again,
The property was placed into a contract for purchase to
Submitted: 2 years ago.
Category: Estate Law
Expert:  RayAnswers replied 2 years ago.
Hi and welcome to JA. I am Ray and will be the expert helping you today. Sister would have burden here to show she has a valid claim. That might be hard since there was a written document and she did this in the presence of the others as well.It sounds like there was a decision made at the time to waive her claim and then the issue is did she have capacity as well as brother.Someone might be under the care of a psychiatrist but that does not make them automatically without capacity. You would want to gather witnesses here, you have the signed document, you can have the witnesses testify there was no pressure on them to sign this and that they had capacity and understanding to make such an informed waiver of their interest. Ultimately the court is the fact finder here and decides whether this was a valid document and capacity, etc.You appear to have good facts to support that and prevail here.Since she verified what it meant and had clear understanding it may be hard for her to try and claim otherwise.It is also possible you decide to settle this for something less than what she is claiming in order to resolve it given the uncertainty.That is something you explore with your lawyer here. I know litigation with family can be real stressful and certainly not easy. I appreciate the chance to help you today.Please let me know if you have more follow up.Thanks again.