Problems You Never Want to See: Money Bequests in a Will

Presented by Kay M. Creasman | Virginia Counsel & VP of ORNTIC

FACTS: Father owned multiple pieces of real estate at the time of his death in 2003.  His will devised the real estate to Son 1 and Son 2 with one condition: that when they sold any of the real estate they inherited from him, and specifically when they sold 123 Busy Street, they were “directed” to pay $1,500 to a specific church and $500 to a specific radio station that played Bible verses.

Son 1 died leaving behind two children. Grandchild 1 recorded a disclaimer as to all tangible and intangible personal property and as to the real estate at 123 Busy Street.

Now, Son 2 wants to sell the property.

Q:  Who owns it and how do they deal with the money bequests?

A: (1) As to the bequests to a church and radio station made 23 years ago, the owners need to provide evidence the entities were paid when the devisees sold other real estate inherited from the Father. If they cannot provide such evidence, then the entities can be asked to provide a statement they have received the bequests. If they cannot provide a statement to that effect, the issue is whether such a bequest will affect title to the real estate. The courts could arguably consider it a condition related to the inheritance of the real estate, essentially a lien. Title insurance is into risk elimination. If they refuse to provide a written statement from an appropriate person, require the money be paid from the sale of the property and state in the deed in a recital that it has been done.

What if the church and/or the radio station no longer exist?  In that case, the inheritance would lapse, but some investigation would need to be done to determine if the congregation had simply moved location. Since the call letters of a specific radio station were designated in the will, if that station still exists, they get the $500--even if their programming has changed. It’s more cost effective for the heirs to pay the $500 than to contest it in court, unless they have personal reasons for doing so.

(2) The disclaimer did not have any effect on the Grandchild’s interest in this specific piece of real estate. They have a 25% interest in it and must sign the deed. If they cannot be located, a judge must appoint a special commissioner to sign the deed on their behalf; their 25% would be paid to the Commonwealth under unclaimed property rules until the Grandchild either files to collect the fees or the funds escheat to the Commonwealth.