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Katya Sverdlov Blog

Tuesday, April 4, 2017

Be very careful about titling assets – you could disinherit your children!

I received a call this month from a man who wanted to  receive his share of his father’s building. The property had a value of approximately $4MM. There were 5 children in total, 2 from father’s first marriage (one of whom was this client) and 3 from father’ second marriage.  The caller could not understand why, after the death of his father, the property was being listed for sale by his 3 half-siblings without any input from him.

After I looked up the ownership of the property, I had to tell him the unpleasant truth: He will not get a penny from the sale of this real estate.

The man’s father originally bought this property together with his step-mother, with the deed saying  “as husband and wife”, which is called “tenants by the entirety” in New York. This creates an automatic transfer at death: if one of the spouses passes away, the surviving spouse becomes 100% owner of the property, even if the first-to-die spouse’s Will states otherwise.

And that is precisely what has occurred in this case. When the father passed away, the second wife became the sole owner of the multi-million dollar property. As the sole owner, having full rights, she conveyed the building to her own children. She had no legal obligation to transfer any part of the building to her late husband’s two children from the first marriage (despite any verbal agreement to the contrary or despite any Will that the father wrote). The father’s control, and my client’s interest in the building, ended upon dad’s passing.

We will never know whether the father wanted to disinherit his two older children. But this was the result.  I have seen this type of scenario (with some variations) on multiple occasions. In all cases, the children from the first marriage are devastated to find out that their parent had (intentionally or not) completely disinherited them. If you are in a second / third / fourth marriage, do not assume that your children will receive any property from their step-parent. Instead, talk to your attorney about properly titling your assets!

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.


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