Imagine you bought a house and, a year and a half later, you discovered bundles of cash that had been hidden away by the deceased former owner. Who would be entitled to the money – you or the former owner’s estate? Confronted with just such a case, an Oregon appeals court determined that the new owner can keep the windfall.
William and Helene Valoff owned a house in Milwaukie, Oregon. After Mr. Valoff’s unexpected death, all assets of his estate were transferred to Mrs. Valoff. Following Mrs. Valoff’s death, her estate sold the house to Helen Sollars. The sale agreement required the estate to leave certain specific items (such as the stove and refrigerator) in the house, but to otherwise remove “all personal property” before the closing of the sale.
About a year and a half after the closing, an electrician working on the house found bundles of money hidden above the ceiling of the basement. The bundles were bound with rubber bands and adding machine tapes bearing Mr. Valoff’s handwriting. Because of uncertainty about who owned the money, the police seized it and found that it totaled about $122,000.
Ms. Sollars argued that she should receive the money because she was the rightful owner of anything left in the house after the closing. The Valoff estate countered that it remained the owner because it didn’t intend to transfer any right to the money when it sold the house. A judge agreed with the estate, reasoning that the sale agreement was for the transfer of a house, not of money that neither party knew about. Ms. Sollars appealed.
In September 2008, the Oregon Court of Appeals ruled that Ms. Sollars was the owner of the money. The court concluded that the sale agreement’s reference to “all personal property” included the bundles of cash hidden in the house. The fact that the money’s existence wasn’t known at the time of the sale made no difference, the court held.
The moral of the story is that it’s not wise to hide assets unless you tell somebody about them, or mention them in your will. Otherwise, if you die suddenly, they might never be found – or by the time they are, they might belong to someone else.