DECEMBER 28, 1998 VOLUME 6, NUMBER 26
It frequently happens that elderly individuals are encouraged to give away all of their property to family members or others. Often, the expectation is that the recipient will "take care of" the elderly person, and distribute the property according to their wishes upon death. The senior is usually encouraged to make the transfers to avoid the probate process, to make it easier to qualify for Medicaid benefits, or both. It may happen that the recipients of such transfers do carry out the senior's wishes, but legal proceedings may be required to sort out what those wishes truly were.
Mary Mosby lived in Virginia, where she owned her own home. She and her second husband had signed wills leaving half their property to her son and half to his son. Mr. Mosby had died in 1994.
At the time of Mr. Mosby's death, Mrs. Mosby was told by a hospital social worker that she should transfer her home and a bank certificate of deposit into her stepson's name so that her husband might qualify for Medicaid coverage. The transfer was not completed before his death, but a week after his funeral Mrs. Mosby signed a deed conveying the house to her stepson and placed his name on the certificate of deposit. At the time she told her stepson that she was taking these steps so that he could "look out for her later in life."
Although the stepson understood that he was to transfer half of her assets to her son upon her death, no document confirming that understanding was ever prepared. In fact, Mrs. Mosby and her son continued to live in the house for the rest of her life.
Eight months after transferring the house to her stepson, Mrs. Mosby signed a new will. This will left her son a life estate in the property, but upon his death everything would go to her brother. A little less than a year later, she signed yet another will, this time leaving half of her estate to her son and the other half to a neighbor. Neither will left anything to her stepson, who she had apparently decided was no longer deserving because he "doesn't do a damn thing for me."
When Mrs. Mosby died two months after the last version of her will, the neighbors brought an action to set aside the transfer of the property into the stepson's name. They argued that she had misunderstood the import of the deed, and that her stepson had coerced her into signing the deed and changing title on the certificate of deposit.
The Virginia Supreme Court disagreed. The justices noted that there is a presumption that a competent person understands the meaning of a document as plain as a deed to property, and that the burden was on the neighbors to overcome that presumption. Furthermore, reasoned the justices, Mrs. Mosby's intent had been to qualify for future Medicaid benefits, and it was not possible to say that she had been coerced into signing the deed.
Although the court suggests the stepson may owe a duty to Mrs. Mosby's son, her neighbors received nothing from her will. Whatever Mrs. Mosby's intent might have been at the time of signing the deed, the transfer turned out to be irrevocable. Ayers v. Mosby, September 18, 1998.
Arizona might well have reached a different result. Under Arizona law, Mrs. Mosby's stepson probably would be found to have held a position of trust and confidence, which would have created a presumption that the transfer was invalid.