Both parents died without wills. Kids are fighting. What happens to the money?

Families can be so complicated. Once parents pass away and money becomes available, the complication frequently turns into outright disputes. A reader recently wrote to me about her family, which is being torn apart by fighting over the estates of the parents, neither of whom left a will. The reader's question and my answer are below:

"Both my aunt and uncle died without a will. They had four children. My uncle died first, he owned a car which his son sold and kept the money. Then he had about 60,000 in the bank which is frozen due to family issues. My aunt died four months later and I was her caregiver for over ten years. When she first came to live with me I was given half the money but then as her disease got worse (dementia) and she became bedridden I got most of her Canada pension. Only one of her children helped out the others my aunt never seen in years. When she passed my cousin has accumulated about 30,000 of her money which she kept because it was in a joint account with her mom. Her father's money has been frozen because of her siblings not getting along. What is going to happen to her dad's money in the bank, and will she have to share her mother's money?"

Something that you didn't mention in your note is whether anyone is applying to the court to be appointed as administrator of both of these estates. This could be the "family issues" you mentioned. I believe that the estates need to have someone appointed, as this will ensure that the estate is properly wound up by someone who can be held accountable and hold others accountable. It doesn't sound as if any of the siblings would be suitable candidates because they are already arguing. I suggest that the Public Trustee of your province might be a good choice. They often step in where the arguing among family members threatens the welfare of the estate as a whole.

One of the reasons I didn't suggest you as administrator is that you may be asked to account for funds you received from your aunt. You said that  you were given half of her money, and that you "got most of  her Canada pension". I suspect that the latter was in compensation for care-giving, though it isn't clear to me why she would give you half of her money when she first came to live with you. I imagine the siblings have questions about that too, and being in charge of the estate under those circumstances might be a conflict of interest.

The father's $60,000 will most likely stay frozen until the courts issue an order naming someone as administrator. The bank is simply not going to pay out funds when the family can't agree on even the basics. Once there is an administrator, he or she will pay any outstanding debts of the estate, then pay out the funds according to the intestacy laws of your province. This means the funds would most likely go to your aunt's estate. The expenses and bills of that estate would also have to be paid, and once that has been done, the remainder would be divided among the four children.

The son who sold the car and kept the money should have his share reduced by the amount of money he got from the sale of the car. It wasn't his to sell, so basically he stole it, but most families are willing to simply reduce the person's share and move on.

The joint account between your aunt and cousin should more than likely be part of your aunt's estate. This will depend on evidence left behind by your aunt about whether she intended for your cousin to inherit that money (like a true joint account) or whether she only put the account in joint names for a reason other than inheritance - such as help with the banking, convenience, or avoiding probate fees.

The law says that this type of joint account - a joint one between parent and child where the money originally belonged to the parent - is part of the estate unless the child can come up with evidence left by the parent showing it's a true joint account. Does this kind of evidence exist in this case? Saying that the parent told her verbally she could have the funds is probably not going to cut it. We also know there is no will that clarifies the situation. Perhaps the bank that set up the joint account kept notes of your aunt's instructions at the time the account was opened.

I can tell you that there is likely going to be confusion over how the joint account is handled. Unfortunately, not all banks are consistently following the law. Some banks are still paying out this kind of joint account to the child, and hoping they won't get caught in the crossfire when the whole mess goes to court.

I would also like to say that where there is no will, the law of intestacy leaves a parent's estate to the children regardless of whether the parents and kids had a good relationship. It doesn't matter one bit that the children weren't in touch and didn't help out, or that someone else did. I know that doesn't feel fair, but that's how it goes when a person doesn't make a will.