A trial court in Bergen County held that a parent’s promise to leave assets to an adult child does not give rise to an enforceable claim of interference with anticipated inheritance since parents are not prohibited from disinheriting their children under New Jersey law notwithstanding promises to the contrary made during the parent’s life.  Gong v. Jeong, Docket No. BER-C-96-14 (Ch. Div., March 3, 2015)

Chu Ja Kong (“Chu”) and her husband, Chi G. Kong (“Chi”), owned commercial property located on Main Street in Hackensack, New Jersey (the “the property”) as tenants by the entirety. In 2008, Chi and Chu executed their last wills and testament (the “wills”). Each will bequeathed the property to the surviving spouse. Upon the death of the surviving spouse, the wills devised one-half the property to a trust for the benefit their son, the plaintiff, Richard Gong, and the remaining half to their granddaughter, Jenny H. Gong (“Jenny”).

In September 2011, Chi sent a letter to his son advising plaintiff that he would be completing his new will (the “Chi Will”) the following week. In the Chi will, Chi said he would bequeath the property to plaintiff. Shortly thereafter, Chi fell down a flight of stairs and was severely injured. As a result, the Chi Will was never signed. Chi and Chu then began to live with their daughter and her husband.

In 2013, Chi and Chu executed a deed transferring ownership of the property to their daughter Haeyoung and her husband Peter in return for $350,000 (the “2013 deed”). At the time of the deed transfer, the property was worth significantly more than $350,000, perhaps as much as $650,000.  It is undisputed that Chi was suffering from dementia and lacked the capacity to make a valid deed in 2013.  Also, it is undisputed that Chi’s signature was forged on the 2013 deed.

Although Haeyoung was to pay $350,000 for the property transferred to her, Chi and Chu agreed with their daughter and her husband privately that the payment for the property would not be made directly to Chi and Chu. Rather, Haeyoung was to pay $250,000 directly to plaintiff in lieu of transferring the money to her parents. Haeyoung would also receive a $250,000-$300,000 gift from her parents, by way of value of the property that exceeded the purchase price. The remaining $100,000 of the purchase price would be kept by Haeyoung to care for her parents while they lived with her, which would presumably continue until their passing. The plan was set into motion, and Haeyoung transferred $180,000 to plaintiff in 2013. On or about October 1, 2013, Chu instructed Haeyoung to make no further payments to plaintiff.

Chi died in February 2014, and was survived by his wife, Chu. Thereafter, plaintiff demanded that Haeyoung pay him a total of $450,000 for the property or he would initiate a lawsuit. When no payments were forthcoming, plaintiff filed a complaint against his sister Haeyoung, her husband Peter and their daughter Jenny disputing the validity of the 2013 deed by asserting claims of fraud, unjust enrichment, conversion, and the like. After Chu learned plaintiff’s complaint disputed the validity of the 2013 deed, Chu executed a new deed in 2014.  The 2014 deed transferred “any present or future rights” Chu had in the property to the defendants in order to “ratify and confirm the transfer of title made by” the 2013 deed.

Defendants filed an answer and cross-claim. The defendants posited the lawsuit was baseless, founded upon plaintiff’s desire that his parents adhere to the traditional Korean custom that the first born son inherits his parents’ entire estate. One year later, in January 2015, defendants filed a motion for summary judgment. After oral argument, the Court granted defendants’ motion, entered summary judgment in defendants’ favor and dismissed the case.

The Court held that, no matter how plaintiff articulated the claims in the complaint or the number of claims alleged, the basic assertion in plaintiff’s complaint, that the law recognizes an enforceable right in the expectancy of an inheritance, is erroneous. The Court stated that:

A person may freely transfer his/her property as he/she deems appropriate, as “the right to freely alienate property interests is one of the most basic rights guaranteed by law.” … The court has not found a New Jersey appellate or Supreme Court decision finding an aggrieved beneficiary of a contingent devise had a recognized cause of action for tortious interference with their anticipated inheritance when the testator/devisor sold the property during his life. [I]t has long been established that “New Jersey law does not prohibit the disinheriting of an adult child.” … [Further,] neither party has asserted Chu is the subject of pending incapacitation action. As such, she is free to alienate her property as she deems appropriate regardless of any testamentary provision. Citations Omitted.

Regarding the purported transfer of the property by way of the 2013 will, defendants conceded the 2013 deed was invalid. As a result, Chu became sole owner of the property by operation of law on the date of her husband’s death as the couple owned the property as tenants by the entirety. At the death of a tenant by the entirety, title passes to the surviving spouse outside of probate by operation of law. After becoming sole owner by operation of law, Chu executed the 2014 deed, thereby insuring the property was transferred to the defendants.

The case is annexed here – Gong v. Jeong, Docket No. BER-C-96-14 (Ch. Div., March 3, 2015)

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