Estate Planning Mistakes: Widower’s Home is Now Owned by his Stepchildren
In 1982, William Irish married Janet Warnshuis, a widow who had 3 children from her prior marriage. In 1987, the couple purchased a home together in Corry, Pennsylvania. Both William and Janet contributed towards the purchase price of the home and they had it titled in both their names, jointly with right of survivorship.
After William retired in 1987, he started a small airplane maintenance company called “Irish Air.” He was concerned about any potential liability resulting from the business’ operation, but was told that the home would not be subject to attachment by his creditors, because it was owned jointly by him and his wife.
Despite the advice he received, in 1990, William deeded title to the Corry property and transferred title to the family car into Janet’s name alone. He did so because he thought it would protect it for liability purposes and provide for Janet in the event he predeceased her. What he apparently didn’t understand was that that because of the way the property was originally titled, it would have passed automatically to Janet, as a surviving joint owner, if William predeceased her, so there was no reason for him to deed the home to her. William would come to regret the day he took it upon himself to transfer the deed to his wife, making her the sole owner.
In 2003, Janet updated her estate planning, and left $20,000 to William and the rest of her estate to her three children, Barry Warnshuis, Candace D. Wells, and Kenneth Jack Warnshuis. Her children were named as executors of her estate.
Janet and William remained married until the time of her death in 2009. After Janet’s death her children, as her executors, sought entry into the Corry home. William refused, claiming that the property was his. The children claimed that the real estate and automobile had passed to Janet’s estate and that ownership should now be transferred to them as part of her estate.
Since the property was titled in Janet’s name, it did in fact become an asset of her estate and subject to the terms of her Will. Since there was nothing in writing that showed that William and Janet intended that the Corry home should pass to William if Janet died first, when William brought the case to court, the Pennsylvania lower court found in favor of the children and against William. It found that he had made a gift of the real estate to Janet. William appealed to the Pennsylvania Superior Court which upheld the lower court’s decision.
The result of this case was certainly not what William intended when he deeded his interest in the home to his wife. The result could have been avoided with a little more attention and advance planning. William should have been more careful how he titled the property and he should have had a written agreement with his wife that the property was not intended to be a gift. He should have met with a Certified Elder Law Attorney who is also an estate planning expert, to discuss the effect of how the property is titled, beneficiary designations, and other strategies to accomplish what William set out to do (provide for his wife and reduce liability from his business) in a better way.
Significant events or changes in your life could alter the way that you originally meant to apportion assets in your estate planning documents. The only way to ensure that your estate plan truly reflects who you are, what you care about, and what you have today is to have your documents reviewed and updated frequently. Learn more at The Fairfax and Fredericksburg Estate Planning Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for a no-cost consultation. Ask about The Farr Law Firm’s Lifetime Protection Program, which ensures that your documents are properly reviewed and updated as needed, so that they will have maximum effect at law.
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