My mother excluded me from her will — before she died, my sibling cashed out her annuity policy, on which I was a beneficiary. Should I sue my family?

Dear Quentin,

My mother recently passed away and I was written out of the will, except for a small amount. She and I had several disagreements over the past two years. This change of will occurred 15 months prior to her death, with her executors present. The remainder of her estate is being divided between my siblings. 

My mother invested in an annuity more than 10 years ago, and all of her children were named as equal-share beneficiaries. Two months prior to her death, at the time she was deemed ready for hospice, one of my siblings (who was her power of attorney and is now the executor of her will) cashed out the annuity and placed the funds into my mother’s account. Thus, the annuity funds are now general-estate account funds, eliminating me from access to them.

Do you feel that I have a claim due to the way this was handled by the executors for their benefit, or would I be turned down in court? All estate lawyers want a substantial amount of money up front to discuss this, so any advice is appreciated. And they wonder why we’re not getting together at Christmas. Thank you in advance for your time.

Axed from the Will

Dear Axed,

I’m sorry that your disagreement with your mother has led to this turn of events. 

Think very carefully before taking any legal action. Each case is unique, and the answer to this letter should not be taken in lieu of legal advice. That said, if you were listed as a beneficiary on an annuity account or life-insurance account, that would have trumped your mother’s last will and testament — but only if those beneficiaries remained unchanged prior to her passing away. 

The devil is in the details, says Neil V. Carbone, a trusts and estates partner at Farrell Fritz PC. Did your sibling act within their rights as POA? “One would have to review the power of attorney to see whether it granted a power that would authorize the transaction in question,” he told me. “If it did not, then it’s possible that a court would void the transaction.”

Your mother would need to have been of sound mind. A person must understand what they are signing when signing a power of attorney — that is, she should have had mental capacity, a term that refers to a person’s ability to sign a document like this. She would need to know why she was signing it, what she was signing, and what was at stake.

“If Mom had capacity at the time, Mom may have instructed the agent to make this change, which would be consistent with the rest of Mom’s estate plan as set forth in her new will,” Carbone said. “If not, a court would likely consider the fact that an agent under a power of attorney had a fiduciary obligation to act for the benefit of the principal.”

“In making such a determination, the court would note that this transaction, in effect, made a gift of the principal’s property to the agent,” he added. “Under the law in some states, including New York, such a gift creates a presumption of impropriety that the agent must rebut. Doing so may be difficult in a few states, like New York.” 

In New York, for instance, there is a rule known as “dead man’s statute” that aims to protect the interests of the decedent — the deceased person, in this case your mother — against her heirs making unsubstantiated claims that cannot be otherwise verified. It does this by excluding communications between the claimant (you) and the deceased.

Of course, there are exceptions, and courts rule on arguments between family members on the dead man’s statute. Among them: If an alleged conversation occurred in front of a third party without an interest or claim to the estate, “this third party may be called upon to testify to the details of the exchange,” according to the Ettinger Law Firm in New York. 

Ultimately, the burden of proof on any claim will lie with you. 

Yocan email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

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