Does Mom’s Promise Hold Up Legally?
“Mom promised me the house.”
“Dad always said I could have his car.”
“Grandma told me that ring would be mine someday.”
These kinds of conversations happen in families all the time. A parent or grandparent expresses what they want to happen to a particular piece of property, and everyone assumes the matter is settled.
But after that person passes away, a verbal promise may not be enough to determine who actually receives the asset.
When it comes to an estate, what someone said they wanted and what their estate plan legally provides for aren’t always the same thing.
Is a Verbal Promise Legally Binding?
Not necessarily.
Whether a verbal promise concerning property can be enforced depends on the circumstances and applicable law. But generally, simply telling a family member, “I want you to have this when I die,” should not be treated as a substitute for properly addressing that asset in an estate plan.
After someone passes away, several things may need to be considered before determining who is legally entitled to an asset.
That can include the person’s will or trust, how the property is titled, whether a beneficiary designation exists, and other applicable estate planning documents or laws.
In other words, the conversation may be meaningful, but it isn’t necessarily what controls the transfer.
What Does the Estate Plan Say?
One of the first places to look is the person’s estate planning documents.
For example, a trust may contain specific instructions about who should receive a home or other property. A will may include gifts of particular assets. The documents may also provide that property should be divided among several beneficiaries rather than given to one individual.
Problems can arise when those written instructions don’t match what family members remember being told.
Imagine a mother tells one of her children for years, “This house will be yours someday.” But her trust directs that her estate be divided equally among all three of her children.
That discrepancy can create confusion and, potentially, conflict after she’s gone.
How the Asset Is Owned Matters Too
The estate planning documents aren’t necessarily the end of the analysis.
How an asset is titled can affect what happens to it after death.
For example, a home held in a trust may generally be administered according to the terms of that trust. Certain jointly owned assets may pass to a surviving owner. Other property may be subject to probate or another transfer process.
This is why estate planning isn’t only about what your documents say. The way your assets are owned should work together with the plan you’ve created.
Don’t Forget Beneficiary Designations
Some assets can pass according to a beneficiary designation rather than through a will or trust.
Life insurance policies and retirement accounts are common examples.
Suppose someone tells one child that they intend for that child to receive a particular account. If the account still names someone else as the beneficiary when the owner dies, that verbal conversation alone may not change the beneficiary designation.
It’s another reason estate plans should be reviewed periodically. Your documents, account designations, and current wishes should be coordinated rather than contradicting one another.
What Happens When Family Members Remember Things Differently?
This is where an informal promise can become particularly problematic.
One sibling may remember Mom saying the house would belong to them. Another may remember her saying it would be sold and divided among the children. Someone else may have never heard either conversation.
After the person who supposedly made the promise has passed away, they are no longer available to explain what they meant.
Even when everyone is acting in good faith, memories can differ. And when significant property or sentimental possessions are involved, those disagreements can quickly become emotional.
Clear estate planning can help reduce that uncertainty.
Sentimental Property Can Cause Disagreements Too
Not every disagreement is about a house or a large investment account.
Sometimes the most emotionally charged assets are the ones with relatively little monetary value.
Jewelry, artwork, family heirlooms, furniture, photographs, collections, and other personal belongings can carry decades of memories. Someone may have promised a particular item to a child or grandchild years earlier without ever formally documenting that wish.
If there are specific belongings you want particular people to receive, talk with your estate planning attorney about the appropriate way to incorporate those wishes into your plan.
If You’ve Made a Promise, Review Your Plan
If you’ve told someone, “I want you to have this when I’m gone,” consider that a reason to look at your estate plan.
Ask yourself:
- Is that wish actually reflected in my estate planning documents?
- Is the asset titled in a way that works with my plan?
- Does the asset have a beneficiary designation that needs to be reviewed?
- Have my wishes changed since my documents were created?
Life changes. Assets change. Relationships change. And sometimes an estate plan created years ago no longer reflects what someone is telling their family today.
A periodic review can help identify those inconsistencies while there’s still an opportunity to address them.
Clear Wishes Deserve Clear Planning
Conversations with your family can be an important part of estate planning, but conversations and legal planning serve different purposes.
If there is a home, account, heirloom, or other asset you specifically want someone to receive, don’t rely solely on the assumption that everyone knows what you wanted.
Make sure your estate plan reflects your current intentions. Make sure your assets are coordinated with that plan. And when your circumstances or wishes change, update the appropriate documents.
Because after you’re gone, your family shouldn’t have to piece together what you might have meant from conversations that happened years earlier.
A verbal promise can communicate your wishes. Clear estate planning can help make sure those wishes are carried out.
If you have questions about whether your current estate plan reflects your wishes, the attorneys at Law Stein Anderson, LLP can help you review your plan and determine whether updates may be appropriate.