You are probably wondering what a “reluctant heir” is. I had never given any thought to the possible existence of such a person either until I had to deal with an heir that would not receive his inheritance. I know what you are thinking — no one will ever have to refer to you as a reluctant heir, and for that matter, me neither.
I would not be writing this article if I hadn’t experienced this very uncommon situation myself in one of my probate cases. A woman passed away leaving a son and a daughter as her heirs. Since the woman didn’t have a will, the law dictates that her estate be divided equally between the son and daughter. When the estate was settled, I sent a six ﬁgure check to the son as his portion of the estate. To my surprise, he mailed the check back to me. After several unanswered letters, I ﬁnally sent a courier to his house to deliver the check in person. The son told the courier that he didn’t want any part of his mother’s estate and that he doesn’t want to be bothered again about the matter. Apparently he had been estranged from his mother for many years and, for whatever reason, would not accept money from her estate.
The law provides that where distribution to a beneficiary cannot be made, the money must be deposited with the State of California. If the beneﬁciary’s whereabouts is unknown and the money is not claimed by the beneﬁciary within ﬁve years, the money can be claimed by the next of kin. However, where the beneficiary’s whereabouts are known but the beneﬁciary simply refuses to accept the money, there is no provision allowing the next of kin to claim the money. After ﬁve years the money becomes property of the State. What an unfortunate quirk in the law!
If you are planning to give an inheritance to someone you have not spoken with for several years or to someone with whom you have a bad relationship, perhaps you should reconsider, or at least plan carefully so that the State doesn’t wind up with your money. The best way to plan for this possibility is to simply have your living trust or will prepared and provide a contingency plan that gives the inheritance to someone else if the “reluctant heir” doesn’t accept it. That way you can keep your hard earned money from the State of California unclaimed property fund.
© 2019 by Marlene S. Cooper. All rights reserved.
(Marlene S. Cooper is celebrating 40 years of practice! Her practice is focused entirely on estate planning, estate administration and probate. You may obtain further information at www.marlenecooperlaw. com, by e-mail at Marlene@ MarleneCooperLaw.com, by phone at (626) 791-7530 or toll free at (866) 702-7600. The information in this article is of a general nature and not intended as legal advice. Seek the advice of an attorney before acting or relying upon any information in this article).