February 25, 2012 (Original publish date) • By Dennis Beaver
There’s nothing like a fight over money to deeply scar wonderful memories of growing up on a dairy farm in California’s Central Valley in the 1960s.
Aida, her sister, Daniela, and their two brothers grew up on such a farm. Their names have been changed.
“It was a happy childhood. We all knew the boys would follow in dad’s footsteps after his retirement, which he and mom looked forward to for years,” said Aida.
But while man may decide, others would argue that it is God who presides.
There would be no retirement.
“One unusually cold winter morning, while checking on the cows, our father had a massive heart attack and died within minutes.”
“He was very good at business, constantly urged by their lawyer to have a will, but always put it off. This was such a horrible thing to do to mom and us kids,” she added.
Where a family business is involved — especially a farm — even a simple estate plan is a gift which can provide practical guidance from caring, insightful parents on who should take over the farm and how property should be dealt with.
But that powerful gift was denied their children.
With family farm heirs, some money now, more over the years
A probate attorney in Fresno helped them with the immediate legal issues and was blamed by Aida for setting in motion events which would cause her to write, “We agreed on a division of the property which would save the business, but it was an emotional decision I felt forced into and now regret.”
Why Aida regretted a decision she reached over 15 years ago — and from which she profited greatly — became clear the longer we spoke: jealousy, envy and greed.
She was, in fact, a one-person “pity party,” bemoaning how badly life had treated her and her husband during the recent economic crisis. “But not my brothers. They did just fine.”
Aida’s complaints were closely examined by probate and estate planning attorney/CPA Linda Monje of Bakersfield. “This estate seems to have been settled in an appropriate, standard and fair manner.
“It was the typical case where her brothers ran the business.
“The sisters — who apparently never intended to be involved in business operations — received substantial yearly payments and were both owners and beneficiaries of a very large life insurance policy on their mother, which the brothers were required to pay,” Monje pointed out.
“I see no basis for Aida or her sister to complain after accepting thousands of dollars over the many years which they agreed to in a negotiated settlement of the estate.”
We can care for mom
In 2010, their mom was in an assisted living facility, with the expenses paid for by her sons. By this time, Aida and her husband “had to shut the doors of our business and were going through our savings, when we had what we thought was a good idea. We could care for mom at home and be paid a lot less than what the facility was charging.
“But our brothers said no. They did suggest that we could look at the life insurance policy and see if some of the cash value could be taken out, which is what we did. I can’t figure out why our request to care for mom at a reduced fee was rejected.”
It does not take a Ph.D. in criminal justice to see that her brothers did her a favor by rejecting the request to care for mom. Aside from any issues of competence as a caregiver, both she and her sister stood to financially benefit from her mom’s death, and Aida was in financial trouble. What would law enforcement think if mom died under suspicious circumstances while under her care?
Why should I pay anything?
“We decided to dip into my future inheritance and take $35,000 from the cash value of the insurance policy,” Aida wrote.
What happened afterwards was yet another interesting look into my reader’s grasp of or conscious disregard for basic fairness.
When money is taken out of a life insurance policy, either as a loan or by cashing in part or all of the policy, in order to keep the policy in effect at the stated benefit amount, what was taken out must be made up, either through increased premiums or outright repayment.
In Aida’s situation, her brothers received a notice of an increase in the monthly premium which they correctly have refused to pay. Aida thinks that she is entitled to keep the $35,000 and yet make her brothers pay the increase in premiums. Talk about nerve!
“They did not benefit from the money and do not owe it,” commented Monje.
We agree, and it was precisely what we told our miffed reader.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.