Inheriting While Incarcerated
America’s prison population is nearing 2.5 million – roughly 1 person in every 133 – so it’s not unusual that I’ve had clients who have friends or family who are incarcerated.
Leaving assets to a federal, state, or county inmate comes with some bureaucratic hurdles and must be done with careful assessment.
In California, when an individual dies leaving an inheritance to a prisoner, both the Department of Corrections and Rehabilitation and the Victim Compensation and Government Claims Board must be notified. If a prisoner owes any money as restitution as part of his or her criminal sentence, the VCGCB with the help of the Franchise Tax Board is going to take its chunk first.
For example, I had an elderly client with very little family who willed part of his estate to a friend doing a few years’ time in state prison. His friend did not owe any restitution on his sentence, and all lawyers and state agencies involved were properly notified.
However, it was later discovered that he hadn’t paid child support to his wife in over 15 years. The arrearage was near $100,000, which was roughly equal to the value of the inheritance my client left him.
In some states, the department of corrections may even collect the cost of incarceration from an inmate’s inheritance by filing a lien in probate court. The State of Connecticut’s laws allow the probate court to extract the cost of incarceration or 50 percent of the inheritance, whichever is less.
If you’re thinking of leaving assets to a guest of the State, I urge caution. If you intend to provide a nest egg for a prisoner’s reentry into society, be aware of the debts they may have incurred as a result of their crimes, and recognize that they don’t have the autonomy to make decisions regarding that chunk of change until their release.
James D. Perry
Tags: Estate Planning, Gifting, Probate, wills
