Sister left out of Father's will

July 13, 2010 4:53 PM

My father left one of my siblings out of his will. How good/bad would it be to split things with this sibling anyway? Details inside.

I am one of three children, and the executor of my father's will. I have one older brother and one younger sister. Brother is very financially stable, laid back, had close bond with parents and very responsible. My sister is less stable financially, quite sensitive, can be difficult to get along with, attention seeking, tends to choose bad relationships and doesn't have good follow through on her life decisions. That said, she is a kind soul whom I love dearly. She tends to enjoy the material side of life a bit more than my brother and I, as evidenced by her spending and debt. She was adopted into our family when she was 4. We are all in our 30s.

My dad passed away and left an estate worth somewhere around 700k. The will is very simple, it leaves everything to be split equally between my brother and I. I have no idea why, I would never have expected that to be the case. The three of us always just assumed that we would split things between the three of us, to the point that they left town before the will was actually read.

Money means more to my sister than to either my brother or me, so will especially painful to her to be left out of the will. My brother and I have better lifetime earning capacity (if things stay as they are in terms of career). We were all put through undergrad and med/law/grad school. My sister did owe my father a small sum of money, which everyone was aware of, so I don't think that he omitted her because she had already received the money.

My brother and I are considering just splitting the estate three ways despite the will. The only people that know the contents of the will are the lawyer, my spouse, by brother and me. My spouse points out that while we may have good intentions, it is not my money to give away. He supports whatever decision we make. My spouse and I are the only ones with children.

If we do this, are we betraying my father? If we do this without telling her, are we doing and unkindness to my sister? Does she have a right to know? Is this the sort of thing that even with the best of intentions will never be kept secret? Is this even possible, or will taxes or a distribution in the form of a money order with my name on it raise a red flag?

I hate the idea of lying, I'm not even sure if I could. But my question to you is, should I?

posted by anonymous to human relations (74 answers total)

I don't think you would be betraying your father if you and/or your brother did whatever you wanted with the money you received.
posted by rhizome at 4:57 PM on July 13, 2010 [4 favorites]

it is not my money to give away

I don't understand why this is the case.
posted by supercres at 4:58 PM on July 13, 2010 [5 favorites]

I would split it three ways, and I think you and your brother are awesome for wanting to split it three ways. And I think it would be a kindness to do your very best to make sure that your sister never finds out.
posted by pseudostrabismus at 5:00 PM on July 13, 2010 [78 favorites]

Actually once you get the money it becomes yours to give away. Your father may have had some bizarre reason for leaving her out, but you apparently don't have any reason to not give her anything. I don't see it as a betrayal of your dad at all... presumably he brought her into the family to be your sister (she didn't choose you or choose to be adopted), and now you're continuing to treat her as a sister. You're doing the right thing. As to telling her the truth, that I have no idea.
posted by amethysts at 5:00 PM on July 13, 2010 [1 favorite]

You and your brother can do whatever you want with the money you receive from the will.

Consider, given her past behavior, using it to set up a special needs trust for your sister (talk to the attorney about this).
posted by HuronBob at 5:00 PM on July 13, 2010 [10 favorites]

I can't advise you about whether to tell your sister about the will, but:

My spouse points out that while we may have good intentions, it is not my money to give away

Of course it is. Your father left the money to you, without conditions, right? You can do whatever you please with it. Share it with your sister, give it to charity, put it in a pile and burn it, whatever you please.
posted by Fiasco da Gama at 5:01 PM on July 13, 2010 [3 favorites]

It is 100% your money to give away.
posted by PercussivePaul at 5:01 PM on July 13, 2010 [3 favorites]

it is not my money to give away (anonymous)

Once it has been given to you and your brother, you're darn tootin' it's your money. Work with an estate attorney to ensure you won't get an extra tax hit for you and your brother to each give your sister a third of your inheritance, and then do it.

I think to share the inheritance is a very, very magnanimous thing.
posted by ocherdraco at 5:03 PM on July 13, 2010 [4 favorites]

Or, put a different way: If you and your brother do something that you think isn't fair (split the money between you) out of deference to your deceased father, you're just a proxy for his pettiness, or whatever. Same, though to a lesser degree, if you tell her that he left her nothing (in my opinion).
posted by supercres at 5:04 PM on July 13, 2010 [1 favorite]

Think of it this way: if you received a financial windfall in any other way (such as if you won the lottery) would you give your sister a gift? It sounds like you would. Once it's your money, you're free to spend it however you wish, even if that means giving 1/3 to your sister.

However, perhaps to honor the spirit of your father's wishes, you could give the gift in a form other than cash, such as a trust. Or you can set her up with some kind of financial planner/coach who can help her reign in the spending and manage the money, and give her the remaining money. It's a perfectly reasonable thing to give since it IS a sizable inheritance.
posted by acidic at 5:04 PM on July 13, 2010 [2 favorites]

Just want to chime in and say that you two are awesome brothers. The money is yours now so do as you see fit. While I am not qualified to address the ethical side of this issue, I think this would be a perfect question to submit to Randy Cohen of the NYT ethicist column ([e-mail])
posted by special-k at 5:06 PM on July 13, 2010

You and your brother take the money, and then do what you want with it, which could include each of you giving your sister half of your respective inheritances.

Your dad may have set things up this way for several reasons, such as. Given what you've said about your sibling, one possibility is that he reasoned that a three-way split with a needy and possibly greedy relative would have complicated the sale of any assets.

Another is that he felt that more money would not help her, that her issues might only be made worse by an inheritance.

Or maybe he wanted the two of you to be responsible caretakers of the third.

Whatever the case, dad chose you and the other child, and not the third. The two of you now get to do what you want with the money.
posted by zippy at 5:08 PM on July 13, 2010 [1 favorite]

And to answer your questions specifically:

If we do this, are we betraying my father?

Surely your father would want you and your brother to use the money in a way that makes you happy. If it will make you happy to share it with your sister, do so, and you'll be honoring your father by doing it.

If we do this without telling her, are we doing and unkindness to my sister? Does she have a right to know?

I think it would be more of an unkindness to hurt her memory of your father. She has no way of knowing why he divided the will the way he did, and can't talk to him to find out. Disclosing this could open a wound for her that she won't be able to heal.

At the same time, if you think it might come out later, it would be better to tell her right away, rather than let her think otherwise and then discover that you weren't honest with her to begin with.

Is this the sort of thing that even with the best of intentions will never be kept secret? Is this even possible, or will taxes or a distribution in the form of a money order with my name on it raise a red flag?

These are questions you ask your estate lawyer.
posted by ocherdraco at 5:10 PM on July 13, 2010

"My spouse points out that while we may have good intentions, it is not my money to give away. "

Uh, it is now!

I worked as an estate attorney before my son was born (still write a few wills here and there), and this kind of thing SUCKS. I always urge parents to discuss with their adult children the intended distribution of their estates; parents doing stuff like this, writing one child out of the will, can destroy sibling relationships for the rest of their lives. I'm so sorry you got stuck with this surprise!

(Speaking just as a human being, I'd honestly be tempted to give her her share, but in trust, with her receiving the interest for now, to receive the principal upon marriage or turning 50 or something. The most charitable interpretation I can think of is that your father expected you and your brother would be helping take care of your sister financially for many years and a trust could help accomplish that. But that might even upset her more, I don't know.)
posted by Eyebrows McGee at 5:10 PM on July 13, 2010 [4 favorites]

My spouse points out that while we may have good intentions, it is not my money to give away.

Is your spouse claiming some share of the money? Everything your father left to you certainly is yours to give away, or to dispose with otherwise as you see fit.

Is this the sort of thing that even with the best of intentions will never be kept secret?

This really is a question for your lawyer and accountant. There might be a way to make it appear to your sister that the money is coming from the estate, but you need to be very, very careful that everything is done properly according to probate and tax law. My sense is that it would be safest from a legal and tax perspective if everything is kept out in the open.
posted by mr_roboto at 5:11 PM on July 13, 2010 [2 favorites]

The will is very simple, it leaves everything to be split equally between my brother and I. ... it is not my money to give away.

Yes it is. You say the terms of the will are "very simple," so presumably they didn't include anything more than what you said, i.e. your dad gave you and your brother the money. You now own the money. You'd be free to give your sister a $100 check as a birthday present, right? Then you're also free to give her a $ (700,000 / 3) check as a gift.

If we do this, are we betraying my father?

No.

If we do this without telling her, are we doing and unkindness to my sister?

Yes.

Is this the sort of thing that even with the best of intentions will never be kept secret?

Yes.

I hate the idea of lying, I'm not even sure if I could. But my question to you is, should I?

No.
posted by Jaltcoh at 5:11 PM on July 13, 2010

I didn't mean to sound alarmist about the sibling relationships. I think you guys are being great to think so generously of your sister and I'm sure thoughtful, loving people can get through this.

But I have seen some DOOZIES. (Including one where I warned the grandfather that his kids and grandkids were going to tear each others' eyes out over his various distributions and he replied, "What do I care? I'll be dead! They deserve it.")
posted by Eyebrows McGee at 5:12 PM on July 13, 2010 [2 favorites]

Is this the sort of thing that even with the best of intentions will never be kept secret?

Yes.

To be clear, I don't know anything about the legal or tax side of this -- I just meant that anything this important tends to be found out eventually.
posted by Jaltcoh at 5:13 PM on July 13, 2010

Your father did what he felt was right while he was living. Now he's no longer living and he will not be hurt by any decisions that you and your brother make.

I think you should give the money to your sister. It will only cause harm and heartache to keep the money from her. I wouldn't even tell her about the terms of your father's will if you can avoid it. Who will benefit from following the will's instructions? No one. But your whole family would be hurt.

It's great that you and your brother agree about this. You have an opportunity to do a wonderful and selfless thing. Opportunities like this are very rare in life. Go for it.
posted by alms at 5:13 PM on July 13, 2010 [2 favorites]

Just wanted to jump in and say it's terrifically kind and generous of you two to want to share with your sister. Good karma. To tell her the truth about it, though, would be unnecessarily hurtful.
posted by fivesavagepalms at 5:16 PM on July 13, 2010 [2 favorites]

Talk to the lawyer.

Ethically I think you're above the board on this. Legally, it's going to be a mess, and I can't imagine you'll be able to keep it under wraps. As an inheritance, it's going to be tax free. As a gift from one living sibling to another, it's going to be subject to gift taxes.

So either you'll need to build a trust to slowly filter that money in a tax-advantaged way, or you'll need to contest the will. Neither seems like an option that will go unnoticed by your sister.
posted by politikitty at 5:17 PM on July 13, 2010 [6 favorites]

I love you! This is a lovely, gentleman's quandary. As a lawyer (an overly emotional one, as you can see) I can say that once the estate is divided according to the testator's wishes, the beneficiaries can use the inheritance however they choose, absent some condition placed on the bequest, which does not appear to be the case here.

Your poor Father did not know how to deal with his troubled daughter, and was seemingly hurt by her. For you to bring her back into the fold of your family -- her only family, I presume -- would be a noble (magnanimous, yes, as ocherdraco said) gesture. So often families are divided over inheritances because of over-grasping by one or more parties. I admire your values and how you choose to express them.
posted by turtlewithoutashell at 5:18 PM on July 13, 2010 [6 favorites]

I think you should split it with her. Your father obviously wanted to punish her by leaving her out, but what he has actually done is punish you and your brother with this painful, stressful issue. I say hush it up, stop talking about it, have the lawyer handle the details and get it done.
posted by BlahLaLa at 5:22 PM on July 13, 2010 [3 favorites]

Is your mother still alive? If so, does that affect anything? If not, maybe thinking of what she would say or do will make your decisions easier.
posted by Several Unnamed Sources at 5:22 PM on July 13, 2010

It may be worth talking to an accountant or someone knowledgeable about taxes; it seems as though your inheritance is tax free, you may have some tax consequences from the gift to your sister. There may be a way to work around it with a trust, etc.
posted by jenkinsEar at 5:22 PM on July 13, 2010 [1 favorite]

Divide the estate the way your father wanted you to. Then your brother and you give your sister an appropriate amount to equal 1/3. You have honored your father's will. Your sister may owe taxes on her gift though.
posted by fifilaru at 5:28 PM on July 13, 2010

I agree with others' assertions that the money is yours to do with as you please. Your father is no longer around to be effected either way by the choices you make regarding this money. If you decide not to give your sister any of the money she will most likely feel betrayed not only by your deceased father but also by both of you.

I disagree others' suggestions about putting the money, if you choose to give it, in a trust for your adult sister. You are her sibling and not responsible for how she chooses to spend the money. Give it free of strings or don't give it at all. By placing expectations on how she is to use the money could also create serious issues in you relationship.

Also...I would tell her the truth. In my experience lying just compounds difficult situations.

Lastly, I am sorry that you are in this position. It is good that you have such a supportive wife and brother willing to stand by you in whatever choice you make. Things could be so much more difficult if that wasn't the case.

Good luck.
posted by teamnap at 5:30 PM on July 13, 2010 [1 favorite]

Is it at all possible that your sister was left out by mistake? If the will was drafted with any kind of professional legal input, it seems unlikely that they'd fail to make disinheriting anyone explicit.

You will need legal help to handle the details. Be especially wary of tax implications. If it looks like it might have been unintended, you may be able to challenge the will and get things divided three ways. I'd only consider this action if you are all 100 percent agreed.
posted by expialidocious at 5:32 PM on July 13, 2010

It is good that you have such a supportive wife and brother willing to stand by you in whatever choice you make.

Agreed, except I don't believe we know the gender of the OP or the OP's spouse.
posted by Jaltcoh at 5:37 PM on July 13, 2010

Agreed, except I don't believe we know the gender of the OP or the OP's spouse.

Yes, correct. Oops.
posted by teamnap at 5:39 PM on July 13, 2010

It's your money to give away, and what your sister does with it after you give it to her is her business. Please realize this. You may expect her to pay off her debt and make good financial decisions, but she may end up blowing it all. Who knows. You have to be fine with it no matter what.
posted by buckaroo_benzai at 5:39 PM on July 13, 2010

I too think it is awesome that both you and your brother are on the same page and want to share equally. Talk to the lawyer about how this can be done taking gift tax issues into account (there is no estate tax this year as things stand right now). As a lawyer but not yours, I agree that once the estate is settled with creditors and the money given to you, it is yours to do as you desire.

I definitely would not tell her if you can any way avoid it. I can't imagine how devastated and unloved she would feel if she found out that her dad wanted to provide for his two natural children, but not her -- his adopted child. Since you all always assumed a 3 way split, I am guessing that you had no idea that your father harbored deep enough resentment/anger/contempt/etc. to exclude your sister from his will. Telling her now would cause needless pain and confusion since he is no longer around to explain his reasons to her.

Perhaps he had valid reasons, perhaps not. But he chose to keep his reasons a secret, wanting to make his resentment/anger/contempt/etc. known through his executor (you) only after his death. Since he dropped that pile in you lap, you can choose to keep his secret out of deep kindness and love for your sister.
posted by murrey at 5:39 PM on July 13, 2010

My spouse points out that while we may have good intentions, it is not my money to give away. He supports whatever decision we make. My spouse and I are the only ones with children.

The spouse is male, and considering they have children, it might be hetero-normative, but statistically likely the OP is a woman.
posted by politikitty at 5:43 PM on July 13, 2010

It's (now) your money to do with what you please. But given what you told us about your sister, maybe your father was fearful of her being frivolous with the $$? Consider setting up a trust or something. Then again, she's 30-something, so perhaps she'll live and die by her own work.
posted by GilloD at 5:44 PM on July 13, 2010

I found out for sure after my father's death that he didn't quite view his adopted kids with the same special eye that he reserved for his biological son. I always suspected this about both of my parents but it was confirmed by my little brother. I also suspect that when my mother dies that inheritance and these issues are going to get a bit ugly. I'm trying to pre-deal with that right now.

Anyway, I don't know why your Dad decided to do this but I think it was the wrong thing to do. When his father died, the only inheritors were his two sons. However, he made a request that they each give a specific gift amount to his wife (a second marriage). The sons honored this wish plus some. My grandfather made some other requests that they were not comfortable with and did not honor. Some people might find that unreasonable but it was their money at that point to do with as they see fit.

It's also not your business what she does with the money though I bet she'd actually really appreciate a frank discussion with you two about how you plan to handle the windfall and maybe even help her get a financial advisor, set up some retirement accounts if that's really not her bag.

I'm torn as to whether you should tell her or not. I'm finding this to be a pretty tough realization in my life. In a way, it's good to have had it confirmed -- I feel less guilt over my own conflicted feelings toward my family. But, on the other hand, it is a real bummer. I guess I'd lean toward not telling her and if she finds out, letting her know that you two care for her like family and that will always include her because she *is* family.
posted by amanda at 5:49 PM on July 13, 2010 [1 favorite]

The spouse is male, and considering they have children, it might be hetero-normative, but statistically likely the OP is a woman.

OK, sorry, missed that.
posted by Jaltcoh at 5:51 PM on July 13, 2010

Do the trust or hell, put all the money in a trust structure for all three of you so your sibling does not get pissed about how you all get the money right away but not her. I would definitely consult an attorney. These will and probate issues are very emotional and all sort of things can come out.

I have seen some pretty ugly things with wills, inheritance and property transfer from a previous life so I feel for you.
posted by jadepearl at 5:54 PM on July 13, 2010

IANYL, but I will offer a few observations.

1. The deceased has the right to have his wishes respected. But: once the will is executed, his wishes will have been respected. If you want to take further action by (each) gifting your sis a third of your inheritance, I think that would be quite lovely.

2. The fact that your sis isn't even mentioned could make the will challengeable by her (varies by state). So in a sense it's probably wise to carry out your plan to redistribute to sis; could save money in the long run.

3. No good will come of trying to keep this secret, and likely much harm. The last thing you want is to have any siblings under the impression that aspects of the will that relate to their interests have been kept secret. I have seen this happen before and it isn't pretty.

4. You have to keep tax implications in mind, but they are not large. See http://www.smartmoney.com/personal-finance/estate-planning/start-giving-it-away-early-8005/ -- all you have to do is file the appropriate forms. If I had concerns about sis's ability to handle a windfall, I'd just give her $24k/year for 7 years (or so). Just put sis's third in a bank account and arrange a $2k/mo. transfer monthly. That has fewer record keeping obligations.

IANYL and this ain't legal advice, just common sense.
posted by Mr. Justice at 5:56 PM on July 13, 2010 [4 favorites]

I think you should let a lawyer who is not part of the family take care of the news and the handling of everything - otherwise you will be the bad guy no matter how fair and kind you try to be.

I can't help thinking that maybe there is some compelling reason he left her nothing - maybe she did get her share already? Is there a way to check that? Did she get some property or expensive jewelry? Did he pay off some of her debt? Did she tell him she wanted nothing? Does she plan to declare herself bankrupt and wanted the money held until after debts are discharged?
posted by meepmeow at 5:56 PM on July 13, 2010

At the federal level, the tax implications are not very complicated.

Not only is there no estate tax this year, an estate of $700K would have been untaxed since 2002, and even before 2002 it would have received only a minimal tax.

It might be worth talking to an estate attorney about what options would be open to anonymous in his capacity as executor if anonymous (as an heir) and his brother each refuse to accept the full amount they were willed.

In the worst case, anonymous and his brother can each receive $350K, and do with it what they please. Include give $117K of it to their sister.

This would be subject to gift tax, but there is a very large exclusion that is tied to the estate tax as well. What it boils down to is that unless anonymous or his brother expect to give gifts in excess of one million dollars or leave an estate in excess of one million dollars, there would not be any tax consequences to giving the sister $117K each right away. But there would be confusing forms to fill out.

If they're worried about that, all they have to do is give the money to the sister in annual chunks of $13K each. Or, if both anonymous and his brother are married, anonymous + spouseonymous and brother and sister-in-law can each give sister $13K/year under the annual exclusion, so it would just take a few years to do it.

It might also be worth having an attorney draft a document wherein the sister acknowledges that she's receiving this in lieu of a direct inheritance from the father.
posted by ROU_Xenophobe at 6:01 PM on July 13, 2010

You need a lawyer. This is not the appropriate forum for this issue.

There are legal issues surrounding the execution of a will.

If you execute it as written, you and your brother splitting it - then after it is executed, then you give your sister some of the money - there are some serious tax issues that will arise.

Get a lawyer.
posted by Flood at 6:02 PM on July 13, 2010

Is it at all possible the will is so old that your father wrote it before your sister was on the scene -- i.e. 30+ years ago? I know it's a longshot, but if it's true it would clarify everything with no ill will.

(sorry, pun not intended)
posted by kestrel251 at 6:06 PM on July 13, 2010 [1 favorite]

While you should certainly get a lawyer involved, I would like to reiterate that it is your money, and it would be very generous and kind and good of you to divide it equally among the siblings.
posted by good day merlock at 6:08 PM on July 13, 2010

You don't say when your father made this will. Is it possible that your sister was excluded unintentionally? My grandfather died when I was young and his will left his estate to my grandmother for life then to the named grandkids who were born before he died, and those born after his death. Which technically excluded 2 stepcousins who joined the family after his death and a cousin who was born before all of us as my uncle's high school girlfriend got pregnant and gave the baby up for adoption and only tracked our family down years later. It took a fair bit of work with the estate lawyers but we ended up splitting the money 8 ways rather than 5. I couldn't imagine not doing that, it was the only right thing to do. So definitely sharing the money 3 ways is the right thing to do.

If we do this, are we betraying my father?

No. Especially if the will was written a long time ago. In any case, it's your money to do what you want with.

If we do this without telling her, are we doing and unkindness to my sister? Does she have a right to know? Is this the sort of thing that even with the best of intentions will never be kept secret?

I'm not a big fan of secrets, but it's worth thinking about how your sister would feel knowing that she was excluded from the will. Being adopted is always going to be in the back of her mind, and finding out that her father excluded her from his will is likely to be quite traumatic for her, even if they weren't close. And if they were close, it's the sort of thing that could call into question her entire childhood and feelings of family and security. So I'd be wary about telling her. Having said that, if there is the slightest chance that it may come up later (are you the sort of family who have arguments? Where this sort of thing might be said accidentally in the midst of a heated discussion? Or by a child unaware of the consequences?) then I'd be straight with her and explain that you have no idea why your father made the will the way he did but as far as you and your brother are concerned, she's entitled to the same share as you and that's why you're splitting it 3 ways. While that may be difficult for her and call into question her relationship with her father, at least it solidifies her relationship with her brothers...

I hope it works out well for you all.
posted by finding.perdita at 6:13 PM on July 13, 2010

If you want to give your sister 116k and your brother wants to give your sister 116k, and that just happens to split the 700 3 ways ( i think, i'm not a math person) that 116 would be yours and your brother respectfully and you would have all the right to do with it what you please.

Is there a chance that leaving her out was a mistake?

If you care about her, and think she could use it, i would certainly say do it. Is there no way to maybe help her seek financial counseling so that she will be wise with it?
posted by djduckie at 6:13 PM on July 13, 2010

I agree with everyone else that giving the money to your sister is fine.

AS LONG AS:

You are really sure your spouse, who brought up "it's not your money to give away," truly means it when he says he supports whatever you want to do. Assuming you and he have joint finances, that money belongs to both of you, and you need to make sure you're both on board before doing this, just as would be the case with any other very large purchase or gift you or he might want to make.
posted by escabeche at 6:27 PM on July 13, 2010

You must discuss this with a lawyer. As a personal representative/executrix/executor, you must abide by the terms of the will. You may then gift your share, but you are not able to directly distrubute contrary to the terms of the will. I am not your lawyer.
posted by Ironmouth at 6:31 PM on July 13, 2010

it is not my money to give away

I don't understand why this is the case.

Because a PR is required by law to execute the terms of the will. It is a crime to do otherwise.

Again, get a lawyer here. What you are talking about requires forethought and planning.
posted by Ironmouth at 6:33 PM on July 13, 2010

Just jumping on the heap with regards to giving her the money. But.. as many have mentioned, give her the money responsibly, through a trust or some other sort of arrangement, so that it's not gone in 6 months with nothing to show for it, since it appears that this could really help her if passed on properly.
posted by defcom1 at 6:37 PM on July 13, 2010

I do think you should go ahead, if you and your sibling agree, and split the inheritance three ways. I do not at all think you should try to keep the true distribution intended by the will a secret. She is an adult. Shielding her from the truth is saying she's not strong enough to deal with it. I think she deserves to know.

Though if she does know, the very wise idea of placing at least part of her share in trust will be much more tricky; she may well read that as being just as patronizing as hiding the fact that her father cut her out of the will.
posted by lemniskate at 6:43 PM on July 13, 2010

I haven't read the other replies, but here are my thoughts:

When one of my daughters married outside her race, her grandmother (my mother) told me she'd be cut out of the will. Her brother and sister told me that if that does happen, they'll be splitting their inheritance with her.

I look at it this way. He left the money to you and your brother. What you choose to do with that inheritance is up to you. Since he is dead and your sister is living, I vote you share. It's the kind thing to do and the right thing to do.
posted by St. Alia of the Bunnies at 6:51 PM on July 13, 2010 [2 favorites]

Hubby says that if it were FL law, it's possible it could work this way: you and brother could each refuse 1/3 of your "share." That would leave a full 1/3 intestate and it would automatically go to the next person to inherit. If your mother is alive then it would be much more complicated; if she is not, then the next person to inherit would be your younger sister. You're the executor, and so it's possible that this might be able to be done without involving her. (He says the most direct way to get this to work out would involve her challenging the will, and it might be a straightforward challenge if you and brother agree, but obviously that involves telling her.)

He says you might end up having to go before a judge, or you might just need to work with a lawyer. And again, he's familiar with FL law, so it might be different in your state.
posted by galadriel at 7:05 PM on July 13, 2010

a P[ersonal] R[epresentative] is required by law to execute the terms of the will. It is a crime to do otherwise.

This is contrary to my personal experience.

When my grandmother died her will included an onerous and insulting restriction on the inheritance left to one of her grandchildren. The executor polled the heirs and by unanimous agreement this restriction was not put in place. (In short, the grandchild received the inheritance immediately like the rest of us, rather than having to jump through various hoops and wait five years.)

The executor, for various reasons, was someone who would not have broken the law.

In any case, you're not coming to MetaFilter for legal advice. We all agree you should talk to a lawyer for the legal advice. But for the ethical advice, the response seems to be nearly unanimous that you should share the inheritance with your sister. Opinion is split on telling her. I'm still in the camp that you shouldn't, if it can be avoided.
posted by alms at 7:09 PM on July 13, 2010

Also consider what your spouses have to say about it. One could argue your responsibility lies with your family (spouse and children) first, and then your sister. It's not always possible to make everyone happy. Chose carefully whose long-term relationship matters most (I'd argue, the spouse). Especially if your sister's track-record with finances and life has been a sore point.

A trust is a fine idea for avoiding the money getting squandered too quickly. But it then puts you and your other sibling in a control position, and that may be unwelcome. Then again, since you're both agreeable to contesting your father's intentions, it does give you a certain ethical bargaining chip. As in, Dad screwed you (who knows why) and we, your siblings know your history with money, but we'd be willing to share if it's through a trust. Sure, she might resent it, but let's be honest, it's a lot of money and she ought to be damned glad her siblings are willing to look out for her in this way. And remember, there are lots of different ways to structure trusts and how the money can be spent.

Your best bet would be to speak with a local attorney that specializes in wills and trusts (or one for each).
posted by wkearney99 at 7:39 PM on July 13, 2010

My mother tried to leave her dead husband's children out of her will. Just before she had life-threatening surgery I told her I'd have no more to do with her if she did that. She relented and did include my step-brothers eventually.... then she died.

It was an ugly division of property in the end. I, too, was an executor. Once the money was in my account, I was free to do with it what I wanted. Not before.

One thing that I was told by our lawyer during the ugly protracted process... was that it was usually spouses that made the estate dispersal ugly. Siblings have, even when angry, ties to each other that go deeper and more complex than spouses ever get. Spouses usually just remember the angry stuff.

I was advised to keep the spouses out of it as they have a much greater vested interest and less emotional history (forgiveness)... so could be a bit more avaricious.
posted by taff at 8:12 PM on July 13, 2010

If we do this, are we betraying my father?

I don't know about the legalities of the situation, but from a moral point of view, if you do what you are suggesting - that is, pretend that your father left the money to be split 3 ways - then yes, of course you are betraying your father's wishes. Moreover, you are betraying your responsibility as executor of his will. Legalities aside, your father made you executor because he trusted you to carry out his wishes regarding the distribution of his assets. He left a will with explicit instructions, and entrusted you to carry out those instructions to the best of your abilities. He did not say "here, take my money and distribute it however you see fit." The fact that you propose something that is ultimately a good deed does not make this any less a betrayal of your father's wishes. In this sense, it is not that different from the opposite situation: your father leaves the money to all three of you, but you and your brother decide that your sister doesn't "deserve" it, so you don't give her the money, and never tell her that he left the money to her.

Other people are quite right to say that, once the money is distributed to you and your brother, you are free to do with it what you want. So of course you and your brother are free to take the money, and then each give half of your windfall to your sister. This would both communicate your father's intentions and perform the good deed of giving the money to your sister. But this is different from expressly ignoring your father's wishes to - for whatever obscure reason of his own - not leave money to your sister.
posted by googly at 8:27 PM on July 13, 2010

I like jadepearl's suggestion - you and your brother set up some kind of trust/joint account with the inheritance, but make it so that any one of your brother, yourself, and your sister can access it; with the consent of the other two. Would this get around the tax problem?

This way, your sister can stabilize her financial debts right away, everyone can enjoy an immediate chunk of liquid cash, and there's a family trust in case anyone has an emergency later. I think my family has something like a 'family trust' - I think it's been around for at least a couple, if not more, generations and it ends up paying for a lot of hospice/end-of-life care for members of the family who never achieved financial freedom or other emergencies (like making the cash for a kidnapping ransom in the dim-wittedly short amount of time specified - kidnappers were not aware of the 'family trust' as kidnapee had many more times that, but not in liquid forms).
posted by porpoise at 8:58 PM on July 13, 2010

Check with a lawyer, but if there are no other bequests or heirs then you may be able to have the property divided equally, with no further tax issues, if you each disclaim your inheritance under the will. Alternatively, a court might be able to invalidate the will if your sister challenged it and neither of you disputed it. In either case the estate would be treated as if your father died intestate. But check with a lawyer before considering either solution.
posted by Joe in Australia at 9:17 PM on July 13, 2010

I'll join with everybody else and agree that there is no reason why you shouldn't agree to divide the money equally if that's what you want to do.

It has also been said above that you should talk to a lawyer who understands your local law and can advise the best way to do it -- it really does vary considerably by jurisdiction. For example, under English law the terms of the will can be rewritten by the executor, with the agreement of the relevant beneficiaries, up to two years after the date of death -- in which case, with the agreement of your brother, you could alter the will to leave three equal shares (I still wouldn't lie about the original will though!).
posted by Quinbus Flestrin at 11:25 PM on July 13, 2010

You need a lawyer. This is not the appropriate forum for this issue.

Buh? This is absolutely an appropriate forum for this issue.

ecause a PR is required by law to execute the terms of the will. It is a crime to do otherwise.

Even assuming this is the case, there is absolutely no reason why the terms of the will cannot be executed and then the OP and her brother can't each gift 1/6 of the total estate to their sister. No muss, no fuss, no estate issues, (almost certainly) no tax issues, everyone is happy. Everyone except...

My spouse points out that while we may have good intentions, it is not my money to give away.

Ah. Urm. Not to put too fine a point on it, but let me suggest that your spouse isn't exactly a neutral uninterested third party here. The $116,000 you propose to give to your sister is $116,000 that your spouse would share (with you) if you didn't. Since the money is quite obviously yours to give away once you inherit it, I don't see any possible basis for this statement except your spouse trying to convince you to keep the money without coming out and saying "keep the money". $116,000 is a hefty sum.

I don't know your sister so I have no idea what you should do here. I do know that this money is absolutely you and your brother's money to do with as you please. Of course once you inherit it it's quite possible half of it is your husband's money but that's between you and him.
posted by Justinian at 5:07 AM on July 14, 2010 [4 favorites]

When did your father write his will? Was it maybe before the adoption of your sister?
posted by Grither at 6:01 AM on July 14, 2010

I didn't read all of the responses here, and you're posting anonymously, so we don't know your jurisdiction, but here's my 2 cents.

You have to decide if you want to try to give her money directly from the estate or if, after you and your bro receive your bequests, gift some of the money to her. There are very important legal issues with either scenario and you should discuss these with your attorney. If giving her the money from the estate, you would likely need to go through probate court to somehow have the will declared invalid (which will likely have collateral consequences, again, speak to your attorney). Additionally, you should read the will carefully (with your attorney) to determine whether your sister was "left out" or explicitly written out of the will. Sometimes when a child isn't explicitly excluded (e.g. "It is my intention that no part of my estate pass to Daughter"), the court may imply a bequest to her. This is especially true if the will was executed prior to her adoption.

If gifting the money, and you're in the US, the amount will be in excess of the annual gift tax exclusion, and you'd likely owe gift taxes (which can be up to nearly 50% of the amount gifted).
posted by melissasaurus at 6:11 AM on July 14, 2010 [1 favorite]

I'd honestly be tempted to give her her share, but in trust, with her receiving the interest for now, to receive the principal upon marriage

Upon marriage? What century do you live in?

Not all women get married, have to get married, need to get married, or can get married in all states if she's a lesbian, so please do NOT make her share conditional upon MARRIAGE! What year is it???

OP: I watched one side of my family get destroyed over settling an estate as decades of bad feelings came out (two siblings were biological, two were from a previous marriage). Yes, by all means, consult an estate planning attorney to ensure the lowest possible impact on yourself and your sibling, but I think that giving your sister the money, in whatever form you feel comfortable doing, is an extraordinary thing.

As for your spouse's opinion, the money was left to YOU. Not to your spouse. So I'm not sure why you need to "check" with them and make sure they meant it when they said to go ahead and do it or whatever.
posted by micawber at 8:00 AM on July 14, 2010 [4 favorites]

The estate and you as executor are almost certainly bound by the will; as inheritors, you and your brother are not. But the tax implications probably differ according to whether your sister inherits the money from the estate or is given a gift from her brothers. You need local, professional advice.
posted by TruncatedTiller at 8:21 AM on July 14, 2010

I don't see any reason you shouldn't split the money with sis (assuming you can work out the tax implications), but you should definitely tell her. You'd be abusing your position as executor (and possibly violating your duty to the estate) to misrepresent the will to her. And she could find out in a number of ways in the future, and then would probably be angrier.
posted by pollex at 11:06 AM on July 14, 2010

"Upon marriage? What century do you live in?"

It remains a common milestone marker for "achieving adulthood," with the theory that then they will want the money for the wedding, or a house, or children. I have had any number of clients create trusts that state "upon marriage or upon turning [some age], whichever comes first."

I did say "or." And I was just listing common disbursement conditions when putting money in trust for an adult. (And I would say that more of my clients made disbursement of trust principal conditional on marriage for their MALE children than their female children; there tended to be an attitude that men needed a wife to settle them down more often than that women needed a husband to become responsible. For women the condition was more often graduating college. But, you know, some of these people are 80 years old. Attitudes change. And every family is different.)
posted by Eyebrows McGee at 11:21 AM on July 14, 2010 [2 favorites]

Also, I should add that in many states most estate lawyers will try to get waivers from any interested parties (e.g. children of the decedent) written out of the will (i.e. "I understand that I am not a beneficiary of the will, and will not contest the validity of the will..."). So she would likely find out the contents of the will even if you didn't tell her.
posted by melissasaurus at 12:51 PM on July 14, 2010

If gifting the money, and you're in the US, the amount will be in excess of the annual gift tax exclusion, and you'd likely owe gift taxes

No, unless they've been gifting madly previous to this. You get a lifetime exclusion, too (usually it's been an accumulated $1 million, but 2010 is weird and unlimited. I think it'll be back to $1 million next year). You just have to file a form everytime you go over your annual limit, and only for the amount over the limit. When all the years' forms add up to more than your lifetime exclusion, then you'll have to pay taxes for the amount over THAT limit.

This is simple stuff- your accountant will have no problem figuring it out. Disclaiming part of your inheritance might be a solution but if it's not possible, or if it's a huge and expensive hassle, just gifting it might be the way to go.

As for whether you should tell... how involved is she? If it were me, it would never occur to me to question my siblings about getting "my" portion of an estate, so telling would be up to mny siblings. It's just, were I a sibling, I hate keeping secrets. Hate hate hate! And I'm bad at it, too.

So, if it were me, I'd say something like, "Oh the will was way out of date and didn't have you in it for some dumb reason but we know that was just a mistake- Dad loved us all the same- so here you go." But that's just me.
posted by small_ruminant at 2:41 PM on July 14, 2010 [1 favorite]

And absolutely it's your money to do what you want with.

Jeez. Echoes of Fanny Dashwood!
posted by small_ruminant at 2:45 PM on July 14, 2010 [3 favorites]

Seconding small_ruminant: Every time something like this involving large sums of money comes up people comment that you incur a large tax burden by gifting large amounts. But that isn't at all true unless you are (roughly) in the top 5% of households in the United States. And even then you almost certainly don't actually have to pay any taxes; your deduction against the estate tax upon your death will be smaller.

It is true there is no estate tax in 2010. It comes back with a bullet in 2011. And there is still a gift tax exemption in 2010.
posted by Justinian at 4:11 PM on July 14, 2010

You get a lifetime exclusion, too (usually it's been an accumulated $1 million, but 2010 is weird and unlimited. I think it'll be back to $1 million next year)

Whoops! PEDANT: this isn't true. There is still a lifetime gift tax exemption and gifts in excess of that exemption are still taxed. It is only the estate tax which was eliminated. This was deliberate or the wealthy would simply gift as much money as possible between generations in 2010 to circumvent taxes.
posted by Justinian at 4:13 PM on July 14, 2010

I would tell your sister. Whatever reasons your father had for leaving her out of the will, he either already told her OR was too cowardly to do so in life.

Yes, it may cause her some anguish, but by not being able to settle this before death, I don't think your father deserves to "get away" with his memory intact afterwards.
posted by Quadlex at 8:05 PM on July 14, 2010

Just seen this, and late to the party, but as someone who did include a sibling who had been left out of a will, you should know that there are benefits to having this done officially instead of just giving the money out after it's been doled out. The person administering the Will can do this.

I believe (but I'm not sure) that if you receive it and then give it as a gift, then the money you give could be taxed more. Or there are problems if one of the original receiptees of the money dies within 7 years . Check with your solicitor what the ramifications of both ways are.

This is in the UK. Your country may vary.

And I would tell your sister about it also. She deserves both the truth and a fair share of the money.
posted by seanyboy at 2:26 AM on July 15, 2010

Justinian's right- I don't know where my brain went on that one. But the $1 million part still stands- unless you're gifting or have gifted more than that, you should be okay- just ask your accountant.
posted by small_ruminant at 8:10 PM on July 15, 2010