APRIL 14, 2008 VOLUME 15, NUMBER 42
We see the same sad story time and again. Sometimes there are small variations, but it almost always starts the same way. Aging parents (or other relatives) need assistance with their finances and their care. As those needs increase, family members begin — often with the very best of intentions — to provide assistance but end up taking advantage. The transition from loving support to financial exploitation is tragic and common.
At least that’s the way we’d like to think Gary and Sheila Taylor of Belton, Missouri, started out. When Mr. Taylor’s father sold his home in Pennsylvania and moved in with his son and daughter-in-law, it looks like everyone thought they would be providing care for him in their home. That was what the son apparently told his two sisters, anyway.
The elder Mr. Taylor had lived in Pennsylvania all his life. His second wife became seriously ill in 1997, and daughter-in-law Sheila Taylor traveled to his home to help out. He signed a new power of attorney naming Sheila as his agent. He added her name to two of his bank accounts in Pennsylvania. When his wife died, he and his son and daughter-in-law agreed it would be better if he moved to Missouri with them.
A few months later, bank accounts in Missouri bore father, son and daughter-in-law’s names. Gary and his father sent $10,000 checks to each of Gary’s sisters, with a note indicating that Mr. Taylor was trying to avoid the probate process. Then the elder Mr. Taylor suffered a stroke, and his care needs escalated.
While Mr. Taylor was still recuperating from his stroke, Sheila wrote a $7,100 check to pay off a credit card in her and Gary’s name. Then she and Gary decided to purchase a farm property and to build a new house on the property that would allow Mr. Taylor to move in. Mr. Taylor’s money paid for the property and construction — and also for a tractor, a utility vehicle and a herd of cows. All were in Gary and Sheila’s names, with no mention of Mr. Taylor’s contribution. Not too long thereafter, Gary and Sheila Taylor did some ironic estate planning of their own, transferring “their” assets into a revocable living trust.
Mr. Taylor ended up living on the farm he had purchased for about six months before going to a nursing home. When he died a few months later, there were no assets left in his name to go through the probate process. Almost $400,000 of money that had once belonged to him had gone into the farm, house, equipment and cows titled in Gary and Sheila’s revocable living trust. Mr. Taylor’s daughters sued, and argued that they should be entitled to a portion of the farm — and even of the cattle herd.
The Missouri Court of Appeals agreed. The appellate judges explained the legal notion of a “constructive trust”—and then ordered that the trial court conduct a new hearing to determine how much of the property belonged to Mr. Taylor’s daughters. Taylor-McDonald vs. Taylor, January 10, 2008.