Dear Liz: When I retired in 2018, I rolled over my 403(b) teachers retirement account into a traditional IRA and made my sister sole beneficiary. I sent her a copy of that beneficiary statement showing her name, her percentage (100%), and my account number. My sister later told me in a phone call that she wished to bequeath me her house should she predecease me. She explained she didn’t have a will but she made her feelings known to our older brother. Even if I were on speaking terms with our older brother, I would find this arrangement naive. Knowing my sister, she actually believes this method is the right way to proceed with her wishes. I’m asking you to be Dear Abby, perhaps, but what do I do?
Answer: You can explain to her that if she doesn’t have a will, the laws of her state will determine who gets her house regardless of what she intended. If your sister does not have a spouse or children, and your parents are dead, you and your brother would probably inherit the home as well as the rest of her estate. You would have to negotiate what to do with the house, which could be difficult if you two still aren’t speaking.
If you can’t get her to write a will, there may be another option. Many states allow “transfer on death” deeds, which are forms that allow people to name a beneficiary for their home. This would ensure that the house is left to you and that it avoids probate, the court process that otherwise follows death.
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