Inheritance Drama: You Got Any? Stories Wanted.

[Zamboni]

For anyone who remembers the saga of the Destroyer of the Last Will and Testament (DotLWaT!), here is a brief recap and update. For those who don't know or can't remember, DotLWaT actually did go to the home of deceased and destroyed the Will within 24 of the death. This was more than a year ago.

Here is a short recap, leaving out all of the juicy drama about the funeral planning and related insanity:

1. Mama Zamboni died after a brief illness that involved hospitalization. She was old enough to have adult children--Mr. Zamboni and his siblings--but she was not that old and she didn't have cancer or anything like that, so the death was fairly sudden and unexpected.

1. DotLWaT went straight from the hospital to Mama Zamboni's home right after her death and found the Will that evening. She informed a few people including Mr. Zamboni and his sister that she found it. DotLWaT stated that she didn't like who is named as heir in it.

2. DotLWaT threatened to burn the Will. Everyone assumed she was joking.

3. DotLWaT then changed her story to "there was no Will" and insisted that she be named Executor of the Estate. The sister of the deceased (Mr. Zamboni's Aunt), whom everyone including DotLWaT seemed to agree was actually named the Executor by the deceased, said "fine, you got it, I don't want to be involved."

4. Mama Zamboni lived alone and unfortunately she was a Hoarder to an extent that she could have been featured on the TV show. Out of obligation, Mr. Zamboni offered to either physically help with her belongings or pay to hire help to clean out her home. DotLWaT got angry at the suggestion. She said she wanted to go through it all herself and she didn't want Mr. Zamboni or his sister involved. Mama Zamboni was a retired public school teacher of modest means who had immigrated to the US without a dime, so it's not like there were priceless heirlooms involved, but DotLWaT apparently thought there is some sort of buried treasure in the home I guess? Dunno. I can't even imagine what she thought she would find.

5. Mr. Zamboni's sister and Mr. Zamboni agreed that DotLWaT could clear out the home herself if that is what she wanted to do, but they balked at DotLWaT's stated plan to move into the home. They agreed that it should be listed for sale and the proceeds split among the heirs via the probate process. DotLWaT begrudgingly agreed to list it for sale after she cleared it out.

So here we are, more than a year after DotLWaT successfully petitioned the court to be appointment Executor. Has Mama Zamboni's home been listed for sale? Nope. No surprises there. Mr. Zamboni's sister has been trying to keep tabs on it, but Mr. Zamboni has ceased all communication with DotLWaT to preserve his own sanity.

Meanwhile, another family member has recently died. Although DotLWaT had openly and repeatedly professed hatred of this person, once he became gravely ill you know DotLWaT began hovering. He seemed to trust her and have no clue what mean and horrible things she has said about him over the years. You may have successfully guessed that she went to the hospital immediately upon learning he died. She said she wanted to see his body and then she told Mr. Zamboni's sister that her plan was going to go from there into his home to "look for important papers." Seriously, WTF. I guess she thought she'd get there before anyone else and the hospital would fork over all the stuff from his locker to her. Then she'd go into his place in a repeat of what she had done when Mama Zamboni died.

But in a twist she wasn't expecting, the hospital staff wouldn't even let her in to see him because she isn't "next of kin." She must have asked about his stuff, because she told Mr. Zamboni's sister that hospital staff had informed her his possessions all go to his wife because he was MARRIED! Which she didn't even know! To be fair, while we knew he had a very serious lady friend, who was often there when we visited and who seemed to be taking care of him for the past couple of years, we also didn't know they had officially married. So his wife inherited everything, much to DotLWaT's annoyance . . . I certainly hope she stayed out of his home and didn't get in there somehow to rifle through his stuff under the auspices of "helping" his wife, but I wouldn't put anything past DotLWaT at this point.

[Ladychips]

@Zamboni will you remind me? What is the relationship between Mr. Zamboni and the Destroyer? Are they siblings?

[RWTL]

For anyone who remembers the saga of the Destroyer of the Last Will and Testament (DotLWaT!), here is a brief recap and update. For those who don't know or can't remember, DotLWaT actually did go to the home of deceased and destroyed the Will within 24 of the death. This was more than a year ago.

Here is a short recap, leaving out all of the juicy drama about the funeral planning and related insanity:

1. Mama Zamboni died after a brief illness that involved hospitalization. She was old enough to have adult children--Mr. Zamboni and his siblings--but she was not that old and she didn't have cancer or anything like that, so the death was fairly sudden and unexpected.

1. DotLWaT went straight from the hospital to Mama Zamboni's home right after her death and found the Will that evening. She informed a few people including Mr. Zamboni and his sister that she found it. DotLWaT stated that she didn't like who is named as heir in it.

2. DotLWaT threatened to burn the Will. Everyone assumed she was joking.

3. DotLWaT then changed her story to "there was no Will" and insisted that she be named Executor of the Estate. The sister of the deceased (Mr. Zamboni's Aunt), whom everyone including DotLWaT seemed to agree was actually named the Executor by the deceased, said "fine, you got it, I don't want to be involved."

4. Mama Zamboni lived alone and unfortunately she was a Hoarder to an extent that she could have been featured on the TV show. Out of obligation, Mr. Zamboni offered to either physically help with her belongings or pay to hire help to clean out her home. DotLWaT got angry at the suggestion. She said she wanted to go through it all herself and she didn't want Mr. Zamboni or his sister involved. Mama Zamboni was a retired public school teacher of modest means who had immigrated to the US without a dime, so it's not like there were priceless heirlooms involved, but DotLWaT apparently thought there is some sort of buried treasure in the home I guess? Dunno. I can't even imagine what she thought she would find.

5. Mr. Zamboni's sister and Mr. Zamboni agreed that DotLWaT could clear out the home herself if that is what she wanted to do, but they balked at DotLWaT's stated plan to move into the home. They agreed that it should be listed for sale and the proceeds split among the heirs via the probate process. DotLWaT begrudgingly agreed to list it for sale after she cleared it out.

So here we are, more than a year after DotLWaT successfully petitioned the court to be appointment Executor. Has Mama Zamboni's home been listed for sale? Nope. No surprises there. Mr. Zamboni's sister has been trying to keep tabs on it, but Mr. Zamboni has ceased all communication with DotLWaT to preserve his own sanity.

Meanwhile, another family member has recently died. Although DotLWaT had openly and repeatedly professed hatred of this person, once he became gravely ill you know DotLWaT began hovering. He seemed to trust her and have no clue what mean and horrible things she has said about him over the years. You may have successfully guessed that she went to the hospital immediately upon learning he died. She said she wanted to see his body and then she told Mr. Zamboni's sister that her plan was going to go from there into his home to "look for important papers." Seriously, WTF. I guess she thought she'd get there before anyone else and the hospital would fork over all the stuff from his locker to her. Then she'd go into his place in a repeat of what she had done when Mama Zamboni died.

But in a twist she wasn't expecting, the hospital staff wouldn't even let her in to see him because she isn't "next of kin." She must have asked about his stuff, because she told Mr. Zamboni's sister that hospital staff had informed her his possessions all go to his wife because he was MARRIED! Which she didn't even know! To be fair, while we knew he had a very serious lady friend, who was often there when we visited and who seemed to be taking care of him for the past couple of years, we also didn't know they had officially married. So his wife inherited everything, much to DotLWaT's annoyance . . . I certainly hope she stayed out of his home and didn't get in there somehow to rifle through his stuff under the auspices of "helping" his wife, but I wouldn't put anything past DotLWaT at this point.

That's crazy.

[Hula Hoop]

@Zamboni that is nuts.  Glad that DotLWaT didn't manage to get her hands on the second relative's stuff.  Good for the hospital staff for standing up for his wife.  Sounds like they may have had some experience with people like her.

[saguaro]

But you don't understand, Grim! They're special! They're better than the designated victim, so the bad things aren't supposed to happen to them!

(Please read this with all of the sarcasm the Internet has to offer.)

Indeed, I was raised in a family that had exactly that kind of value system. I've also seen it in the occasional workplace, church, charity, social club, and school. That's why I can laugh about it.

On a more serious note, you've identified a very common phenomenon in groups of people where there's one designated person who is destructive, predatory, abusive, or otherwise toxic. People develop strategies to avoid being abused themselves, and to gain status within the group. Part of what a flying monkey thinks he or she is doing is buying immunity from the abuse. When that tacit contract isn't upheld by the abuser, it comes as a surprise because the flying monkey truly believes there's a quid pro quo.

I've made a study of groups of toxic or dysfunctional people. They're like a messed-up Imperial court, with a toxic Emperor in the middle of it and a bunch of courtiers, profiteers, and other people jockeying for position or simply trying to get by and dodge the worst of the abuse. They end up unintentionally creating the environment the toxic person needs to survive, and perpetuating the toxicity by filling the vacuum left when the family alcoholic sobers up or the abusive boss leaves.

I've identified seven different ways in which individual people unintentionally contribute to a toxic family or environment. The process showed me how to identify toxic groups of people from a distance, without getting involved, and how to permanently leave a toxic group to do some things differently. I published the book a few years ago on Amazon.

I didn't realize you knew my sister!

Based on her bullshit when I was co-exec of my parent's estate, I have kept contact with her to the bare minimum. All my other siblings have developed amnesia resumed cordial relations with her and I am the odd man out. Apparently they can't see she's simply a snake who has recoiled and is awaiting her next opportunity to strike. It won't be me, nor will I pick up the pieces for her next victim. Maybe I need to read your book.

This describes my sister too (executor/estate shenanigans courtesy of her detailed earlier in this thread) and our flying monkey cousin who is showing herself to be just as toxic.

Oh, and the few family members who want to see us all reconcile now, who of course expect me and my other sister to "develop amnesia" according to their own notions of "family".

I would be interested in the book as well.

[Zamboni]

Me too, what is the title of this book?

[BNgarden]

Sorry, no inheritance drama.  But, link below is a short piece on narcissistic conspiracy I came across (cause a woman is being stalked / harassed here in my city by a politically connected group of awful people, and is trying to shine light on their behaviours and connections):
https://thoughtcatalog.com/shahida-arabi/2018/03/the-narcissistic-conspiracy-scapegoating-smear-campaigns-and-black-sheep-how-narcissistic-groups-bully-their-chosen-victims/

[TheGrimSqueaker]

Me too, what is the title of this book?

Hi! Check your inbox; I sent a link.

[frugalecon]

Me too, what is the title of this book?

Hi! Check your inbox; I sent a link.

GS, you helped me some years ago in a different thread, when I was dealing with a toxic vampire type of person. I really appreciated your honest feedback about what you saw…sounds like you have really learned the hard way from situations.

[Purple_Crayon]

With my family, the biggest controversary has been guilt trips over NOT taking a relative's stuff.

When my Grandma died, my parents asked us to come out to help do some trailer runs to the thrift store. During the visit, my mom asked me to go into the house to find anything I wanted. I walked through every room, remembering her house and things I did there as a kid. I told my mom that I didn't feel right taking anything from the house (and it was obvious that seemingly everyone in my family felt the same way because it was untouched for weeks after she died).

Eventually, I discovered the one and only thing I ended up taking -- a stack of unfinished crossword puzzles in her den, each page half done in her handwriting. For the last six years, a few times per month I'll hang out with her and help her with the puzzles she started and didn't finish.

Two books left.

[Dicey]

With my family, the biggest controversary has been guilt trips over NOT taking a relative's stuff.

When my Grandma died, my parents asked us to come out to help do some trailer runs to the thrift store. During the visit, my mom asked me to go into the house to find anything I wanted. I walked through every room, remembering her house and things I did there as a kid. I told my mom that I didn't feel right taking anything from the house (and it was obvious that seemingly everyone in my family felt the same way because it was untouched for weeks after she died).

Eventually, I discovered the one and only thing I ended up taking -- a stack of unfinished crossword puzzles in her den, each page half done in her handwriting. For the last six years, a few times per month I'll hang out with her and help her with the puzzles she started and didn't finish.

Two books left.

Awww, that is so sweet!

[Capsu78]

A nice movie I just watched on Amazon Prime "The Bridge at Harimaya" has a touching storyline dealing with after life issues as well as other ones.  As a bonus, it is filmed in a beautiful part of rural Japan.

https://www.amazon.com/Harimaya-Bridge-Ben-Guillory/dp/B005FDWERE

[AdrianC]

Potential for some drama here.

My dad just passed away. He had a will, written in 2009. My brother is executor. This is in the UK. I’m on a different continent.  I was able to be there with him for his last 3 weeks (it’s good to be FI).

The will is simple. Mostly everything is 50/50 between my brother and me. There are several areas that could turn dramatic, the main one is the family business. Dad started the business in the early 80’s. Brother worked for it then was made partner with dad. Dad retired about 10 years ago and brother took over, expanding the business. He has worked very hard at it.

It seems I will inherit 25% of this business. I don’t want it. Brother ran it, it’s his business. We all assumed that this had been taken care of in the will and brother would get dad’s shares, or they died with him. Apparently not. I've said I will sign it over to him, but we have to be sure about the tax consequences.

[ATtiny85]

Potential for some drama here.

My dad just passed away. He had a will, written in 2009. My brother is executor. This is in the UK. I’m on a different continent.  I was able to be there with him for his last 3 weeks (it’s good to be FI).

The will is simple. Mostly everything is 50/50 between my brother and me. There are several areas that could turn dramatic, the main one is the family business. Dad started the business in the early 80’s. Brother worked for it then was made partner with dad. Dad retired about 10 years ago and brother took over, expanding the business. He has worked very hard at it.

It seems I will inherit 25% of this business. I don’t want it. Brother ran it, it’s his business. We all assumed that this had been taken care of in the will and brother would get dad’s shares, or they died with him. Apparently not. I've said I will sign it over to him, but we have to be sure about the tax consequences.

Sorry about your loss.

Good luck, sounds like positive intent in place, just need to figure out paperwork that makes it work. Hope it goes smooth.

[Zamboni]

A nice movie I just watched on Amazon Prime "The Bridge at Harimaya" has a touching storyline dealing with after life issues as well as other ones.  As a bonus, it is filmed in a beautiful part of rural Japan.

https://www.amazon.com/Harimaya-Bridge-Ben-Guillory/dp/B005FDWERE

I'll have to check this out, thank you for the recommendation!

Potential for some drama here.

My dad just passed away. He had a will, written in 2009. My brother is executor. This is in the UK. I’m on a different continent.  I was able to be there with him for his last 3 weeks (it’s good to be FI).

The will is simple. Mostly everything is 50/50 between my brother and me. There are several areas that could turn dramatic, the main one is the family business. Dad started the business in the early 80’s. Brother worked for it then was made partner with dad. Dad retired about 10 years ago and brother took over, expanding the business. He has worked very hard at it.

It seems I will inherit 25% of this business. I don’t want it. Brother ran it, it’s his business. We all assumed that this had been taken care of in the will and brother would get dad’s shares, or they died with him. Apparently not. I've said I will sign it over to him, but we have to be sure about the tax consequences.

Hopefully the paperwork on that won't be too complicated. When I got divorced I was able to just able to remove myself from a family business just by saying I wanted out. There were some forms to sign, but I don't remember anything at all about taxes, but I am in the US.

[former player]

Potential for some drama here.

My dad just passed away. He had a will, written in 2009. My brother is executor. This is in the UK. I’m on a different continent.  I was able to be there with him for his last 3 weeks (it’s good to be FI).

The will is simple. Mostly everything is 50/50 between my brother and me. There are several areas that could turn dramatic, the main one is the family business. Dad started the business in the early 80’s. Brother worked for it then was made partner with dad. Dad retired about 10 years ago and brother took over, expanding the business. He has worked very hard at it.

It seems I will inherit 25% of this business. I don’t want it. Brother ran it, it’s his business. We all assumed that this had been taken care of in the will and brother would get dad’s shares, or they died with him. Apparently not. I've said I will sign it over to him, but we have to be sure about the tax consequences.

I'm sorry for your loss.

Regarding the business there are two possible routes to go down.  One is that you accept ownership of your share of the business and transfer it to your brother.  The other is that you disclaim that part of your inheritance altogether.  This might be difficult, depending on the wording of the will (if it is mentioned separately then it is reasonably simple, if it is part of everything (eg a statement such as "half each of everything I own") I'm not sure if you can do this, you might need to take advice.

You do need advice on the tax implications if your father's estate is worth more than £325k (£500k if he left his house to his children or grandchildren), because a gift specifically mentioned in a will can be tax free (with the tax paid out of the remainder of the estate) and the tax payable on it from the rest of the estate can change the balance of what each person gets quite significantly.

The gov.uk site is a good starting point but won't answer all the questions.  You and your brother need to work out the consequences before acting, and that may need specialist advice.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm35161
https://www.gov.uk/inheritance-tax

[AdrianC]

Thanks, all. Has been rough.

Regarding the business there are two possible routes to go down.  One is that you accept ownership of your share of the business and transfer it to your brother.  The other is that you disclaim that part of your inheritance altogether.  This might be difficult, depending on the wording of the will (if it is mentioned separately then it is reasonably simple, if it is part of everything (eg a statement such as "half each of everything I own") I'm not sure if you can do this, you might need to take advice.

We will be taking advice. Just hope it's the right advice. I have not seen the will and don't know the wording. Brother is under the impression that the will is for his eyes only. Not sure if that's a UK legal thing. I'll mention it.

You do need advice on the tax implications if your father's estate is worth more than £325k (£500k if he left his house to his children or grandchildren), because a gift specifically mentioned in a will can be tax free (with the tax paid out of the remainder of the estate) and the tax payable on it from the rest of the estate can change the balance of what each person gets quite significantly.

The gov.uk site is a good starting point but won't answer all the questions.  You and your brother need to work out the consequences before acting, and that may need specialist advice.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm35161
https://www.gov.uk/inheritance-tax

Thanks for the links. I've been reading. But definitely we need to get a solicitor and tax accountant involved. It would be best for all if brother can just hand it off to a professional. It is not his area of expertise at all, or mine. We're both engineers...

[Villanelle]

If your brother is difficult, you can always make him buy the shares from you.  Your father's intent seems clear--he wanted you to have half of everything he owned, including his 50% of the business.  While it's very nice of you to just hand that off to your brother, this doesn't seem like an oversight by your dad.  So if your brother wants to be shady, hide the will from you, etc., you can always take what was rightfully left to you and then sell him your 25% of the business for fair market value, or a slight family discount. 

[former player]

Your brother is right, strictly speaking, that wills are private to the executors.  But this is only until probate is granted, when the will becomes public and anyone can get a copy from the public records office.  So it's pretty pointless that he is keeping it from you now when you will be able to see it as soon as probate is granted.

Getting a valuation for the business will have to be done for tax reasons before the grant of probate.  Any inheritance tax due also needs to be paid before grant of probate.

So the order of operations should be: first, the executors establish the value of the estate.  Second, you understand the implications for inheritance tax, both how much is payable and which parts (if any) of the estate are to be inherited free of tax and which parts of the estate the tax will be payable.  Third, you find out whether the way the will is drafted allows you to disclaim inheritance of your part of the business and who gets the value of that part of the business under the will if you do disclaim (depending on how the will is drafted this might not be your brother).  Fourth, you find out the tax consequences of disclaiming that part of the business.  Fifth: if you can and still want to disclaim your part of the business you will need to do so before grant of probate.  Sixth, the executors pay inheritance tax and get the grant of probate.  Seventh, the executors transfer ownership of the estate to the inheritors.

You certainly shouldn't give up your share of anything under the will unless you've seen the original copy that will get probate and seen advice on whether and how you can give up your share of the business and what the consequences for tax are.  It might be less complicated for you to inherit your part of the business and then pass it over to your brother, and this is probably the only way to go if your brother is not forthcoming about the contents of the will, the value of the business and the tax implications.  The only slight downside of inheriting and then giving it to your brother is that if you die within seven years of the gift there may be a second lot of inheritance tax to pay on the value of your gift.  Hopefully the chances of that are low and if it worries your brother he can take out life insurance on you for seven years to cover the potential tax liability.

The worst thing that can happen, as demonstrated by this thread, is that families fall out over an inheritance, and because all this complication happens when people are grieving it's easier for that to happen.  I hope you navigate a soccessful way through it all with your family.

[AdrianC]

The worst thing that can happen, as demonstrated by this thread, is that families fall out over an inheritance, and because all this complication happens when people are grieving it's easier for that to happen.  I hope you navigate a successful way through it all with your family.

Thanks.

I did come across this: Deed of Variation
https://www.gov.uk/alter-a-will-after-a-death

"You can change a person’s will after their death, as long as any beneficiaries left worse off by the changes agree."

Not sure if this is an option for us. There are some other complications. In one of his more lucid moments, dad asked me to make gifts from his estate to a few charities and two people he had left out. It doesn't amount to a lot (40k) and brother and I decided it would be easier for us to just make the gifts ourselves after the monies are disbursed. Probably better to do through a Deed of Variation.

Regarding the business, I believe it has 100% exemption from estate tax.

[former player]

The worst thing that can happen, as demonstrated by this thread, is that families fall out over an inheritance, and because all this complication happens when people are grieving it's easier for that to happen.  I hope you navigate a successful way through it all with your family.

Thanks.

I did come across this: Deed of Variation
https://www.gov.uk/alter-a-will-after-a-death

"You can change a person’s will after their death, as long as any beneficiaries left worse off by the changes agree."

Not sure if this is an option for us. There are some other complications. In one of his more lucid moments, dad asked me to make gifts from his estate to a few charities and two people he had left out. It doesn't amount to a lot (40k) and brother and I decided it would be easier for us to just make the gifts ourselves after the monies are disbursed. Probably better to do through a Deed of Variation.

Regarding the business, I believe it has 100% exemption from estate tax.

It sounds as though you are getting on top of this and having productive discussions with yoru brother, good for you.
If you can give the charitable gifts from the estate then they will reduce the amount in the estate which is subject to inheritance tax by the amount of the charitable gifts, so that would be a good reason to give them through a Deed of Variation, and if you are doing that it is easy to add the personal gifts in as well, with two advantages - the recipients will be able to see that the gift is coming directly from your father, and if you or your brother die leaving a taxable estate in the next 7 years the gifts don't have to be counted back into your estates.

And with that I think you've reached the limits of my knowledge - and if 40k from the estate "is not a lot" there should be plenty of financial scope for getting expert paid advice!

[talltexan]

It sounds like you are sincere in wanting to recognize the value your brother has built in this business and minimize the trouble for each of you. If you do want to go down the route of selling shares, I wonder if there's a way to have brother pay you a fraction of revenue/profits over time as a way to buy you out where he won't need to borrow against it or be cash constrained.

[stealthwealth]

My FIL invested in an obviously topping out stock at the height of the pandemic stock market, went mostly all in, and has ridden it to a parabolic 90 plus percent loss on something like $3M.  My wife and I have built our own fireable stash, greatly helped by the pandemic, and I'm still working but not out of need but more to be extra secure with an unknown terminal inflation picture.  We're pretty much FI in other words.  But his plan had been to split his wealth between my wife and her siblings after he dies in the future.  We tried warning him numerous times that he was in a bad investment and that he needed a good exit strategy or diversification, and he violated his own maximum 20pct loss rule.  But he's held it.  Fortunately he kept a few hundred thousand in a savings account so he isn't destitute, but he still seems to think it's going to shoot back up, which I doubt will happen.

[Turtle]

My FIL invested in an obviously topping out stock at the height of the pandemic stock market, went mostly all in, and has ridden it to a parabolic 90 plus percent loss on something like $3M.  My wife and I have built our own fireable stash, greatly helped by the pandemic, and I'm still working but not out of need but more to be extra secure with an unknown terminal inflation picture.  We're pretty much FI in other words.  But his plan had been to split his wealth between my wife and her siblings after he dies in the future.  We tried warning him numerous times that he was in a bad investment and that he needed a good exit strategy or diversification, and he violated his own maximum 20pct loss rule.  But he's held it.  Fortunately he kept a few hundred thousand in a savings account so he isn't destitute, but he still seems to think it's going to shoot back up, which I doubt will happen.

Ouch! I'm sorry.  Even watching from the sidelines, that's painful

[frugalecon]

My FIL invested in an obviously topping out stock at the height of the pandemic stock market, went mostly all in, and has ridden it to a parabolic 90 plus percent loss on something like $3M.  My wife and I have built our own fireable stash, greatly helped by the pandemic, and I'm still working but not out of need but more to be extra secure with an unknown terminal inflation picture.  We're pretty much FI in other words.  But his plan had been to split his wealth between my wife and her siblings after he dies in the future.  We tried warning him numerous times that he was in a bad investment and that he needed a good exit strategy or diversification, and he violated his own maximum 20pct loss rule.  But he's held it.  Fortunately he kept a few hundred thousand in a savings account so he isn't destitute, but he still seems to think it's going to shoot back up, which I doubt will happen.

That is really unfortunate, that so much of the wealth your FIL probably worked hard for has vaporized. Fortunately you were not going to need an inheritance to be FI. Are the other heirs in a similar situation as you, or is this going to create hardship for one or more of them?

[stealthwealth]

No one is bad off, but we're the only ones I'm aware of that are fi.  I'm more worried about minimizing losses than taking big risks for high potential gains.  I prefer going after series of 10 percent gains iow. 

[eostache]

We are onlookers to this impending inheritance situation, so not our circus. We may be affected as it involves the rental we have been living in for a dozen years.

We have been renting from a private LL man (in his 90s) for a dozen years. Our rental is “rustic” and we have been paying way under market rent. Our LL has never raised the rent on us. We are in a 5-plex in town. Our LL is elderly and a widower and over the years we have become friendly with him and helped him with many things at this rental, and at his nearby house, and with personal things sometimes. We would sometimes share meals or go out to lunch or dinner together. Of course we always pay our rent on time and keep an eye out for things happening at this rental property.

He has an older daughter (OD) (single, almost 70) who we get along with. She has had somewhat unstable living situations but for the past few years has been a live-in caretaker for a fairly wealthy widow. OD has adult children and maybe even grandchildren but I don’t know if she has much of a relationship with any of them. I don’t think LL has any relationship with these grandchildren, maybe barely knows them.

He has a younger daughter (YD), married, no kids, late 50s. OD is a half sister. YD’s mother may have been LL’s wife who died a couple decades ago. I don’t know the details of the family relationships. YD does not like OD, although OD would like to be able to get along. So OD keeps her distance but calls or visits LL father from time to time when she can.

We get along with YD ok, but observe that she is entitled, narcissist and manipulative.
YD lives in another state, doesn’t work, and seems financially stable. Her husband is nice enough and we get along with him too. I think YD has a house she has long owned in a third state that she rents out, so she has some assets there. Her and her husband have health issues that limit what they can do.

LL’s health is failing quite a lot recently, cancer I think. He is getting hospice care at home. YD and husband have come to town to stay with him to help him. They even brought their cat so I assume they will be here for quite a while.

LL owns our 5-plex that has two adjacent empty lots, another 3-plex rental, and a rental house next door to that. He has several long term renters (probably most paying way under market rent) and his tenants like him a lot. Plus his own house. He has managed all his rentals on his own for decades. He fixes things himself, or hires someone to fix things. All his properties are old and outdated, but functional.

I’m not sure what he has for money. He has been driving a 20+ year old car that he bought new. He’s frugal and seems to handle his money well. We have helped him with projects and he would often pay us though we tell him he doesn’t need to.

YD seems to have $$ in her eyes and  her sights set on inheriting everything, but I really have no idea of what the plans are. I don’t ask. I have no idea if OD is going to inherit anything.

OD has previously lived in an apartment in the complex we live in. I don’t know if he may leave this property to her as a place for her to live and make some income with. If so, she would probably encourage us to stay.

LL’s house is functional but very outdated and the yard is large and requires a lot of maintenance. He also has a lot of stuff, though it is fairly well organized.

YD may  inherit the property we are renting. She would be a long distance landlord. Or she might sell it all. Her husband does not want to live here. We are not sure how well a property management place would manage a rustic place like this. We have it in mind to move anyways, to see new sights.

[TomTX]

You could offer to act as the property manager...

[eostache]

You could offer to act as the property manager...

I'm not sure how involved I want to get in the whole thing.
If Older Daughter ends up with the property, she would probably be ok to deal with.
Younger Daughter is the type of person I really want to avoid, so it's a no go with her.

[SwordGuy]

You could offer to act as the property manager...

I'm not sure how involved I want to get in the whole thing.
If Older Daughter ends up with the property, she would probably be ok to deal with.
Younger Daughter is the type of person I really want to avoid, so it's a no go with her.

An excellent Mustachian suggestion and an equally well thought out Mustachian response!  :)

[AlanStache]

You could offer to act as the property manager...

I'm not sure how involved I want to get in the whole thing.
If Older Daughter ends up with the property, she would probably be ok to deal with.
Younger Daughter is the type of person I really want to avoid, so it's a no go with her.

An excellent Mustachian suggestion and an equally well thought out Mustachian response!  :)

eostache you could always quit the job if YD gets involved, or OD is not ok to deal with. 

[eostache]

You could offer to act as the property manager...

I'm not sure how involved I want to get in the whole thing.
If Older Daughter ends up with the property, she would probably be ok to deal with.
Younger Daughter is the type of person I really want to avoid, so it's a no go with her.

An excellent Mustachian suggestion and an equally well thought out Mustachian response!  :)

eostache you could always quit the job if YD gets involved, or OD is not ok to deal with.

We have stupid cheap rent, which is very nice. If things keep going ok here in the future we will try to stay. But we have the eject button nearby to get out if it gets bad. It has given us incentive to clear out a lot of clutter in case we have to move.

[Zamboni]

^Wise move. Always better to be clutter free anyway.
 
I'm sorry to read about your LL's failing health. He sounds like a nice guy.

[eostache]

^Wise move. Always better to be clutter free anyway.
 
I'm sorry to read about your LL's failing health. He sounds like a nice guy.

I stopped by to see him today (and drop off the rent check). He was sitting up in his favorite chair. He's on oxygen. He was happy to see me. I stayed a while visiting with Younger Daughter and her husband. LL drifted off to nap in his chair. YD said he has better moments, and bad moments, but is failing. Her and her husband are doing a very good job taking care of him.

[ducky19]

Good to hear that they are at least taking good care of him in his final days.

[glacio09]

We are onlookers to this impending inheritance situation, so not our circus. We may be affected as it involves the rental we have been living in for a dozen years.

This is very similar to the situation that I'm in, except my landlord is in her mid 80s and I don't have any interaction with her (it's been my husband's apartment for 11 years). I am hoping she lives a long, long, and happy life, while socking as much money as possible into savings. About twice a year she won't cash the rent checks for 2 or 3 months and it's always with bated breath if this is going to be the start of the inheritance drama. I'm hoping that we'll leave the state before that happens, but I have a list of for sale condos just in case.

Good luck!

[Catbert]

I'm putting myself on report as contributing to/allowing potential inheritance drama.  DH and I were both married before and our investments are "his" "mine" and "ours."*  "Ours" is the largest pot, with "mine" second and "his" the smallest at around 550K.   When we reviewed our estate planning last year, we designated his accounts to go directly to his sons rather than to me with them as alternates.  He told his sons that they would get "his" assets upon his death and probably told them the approximate amount.  DH is likely to predecease me so eventually they will get much of "our" assets but it could be a long time. So that's the background.  Now the story.

His youngest son (mid-40s) has been talking a lot lately about wanting to buy a house.  While according to him he has great credit, he can only get a loan of 300K based on his income.  Hmmm, what to do since he doesn't want to leave our HCOL area?  I took this as a hint and ignored it.  I'm not sure if DH understood the hint, but yesterday son directly asked him for his share of the eventual inheritance.  DH would like to do so in order to facilitate a house purchase.  I'm okay with it if it doesn't cause us tax problems.  I did the rough math yesterday.  Some of the money is in a money market and Roth IRA but a chunk is in tIRA so fully taxed.  I figured with 24% income tax, 10% state and 3.8% NIIT it'll cost us about 42K in taxes.  That'll still leave him with ~200K.

Several potential sources of drama.  The two brothers are exact opposites in personally, politics, and every other way except that they are both bad with money and careers.  The plan is to not tell the other son.  He lives on a different coast and the boys don't speak, however, you know how families are.  Ex-wife (sons' mother) is very close to youngest son.  She'll certainly guess where this 200K came from.  She may even have been the one to suggest he hit up his Dad for the down payment.  While the older son doesn't talk to his mother often, I envision him finding out that his brother is buying a house and drawing a logical conclusion that one of his parents loan/gave money.  If we paid both the boys their "inheritance" in a single year it would put us somewhere in the 32% federal bracket which would be a hard "Hell No". 

I'm not at all sure what you can buy for 500K in our area.  Probably a fixer-upper on the outer fringes.  Condos can be a long-term problem if they don't have adequate reserves - and relatively inexpensive ones often have owners that want to keep HOA dues down at the expense of reserves.  He could move to a lower COL area (like his mother's) but that means he would be further from his own son.

Since my DH started RMDs he's given them to his sons as a Christmas present (5K each last year).  By getting his share now, youngest son will forgo getting this Christmas gift.  Or will he?  DH may feel bad giving one son a large Christmas gift and the other a shirt.  This already happen when younger son "borrowed" several thousand with the plan to deduct it from the annual gift.  But when the time came he got his usual gift.  This is an area I'd put my foot down on.

When DH eventually dies, will youngest son forget his "early inheritance" and be upset that his brother gets it "all"?  Or upset that he got "only" 200K while his brother's half will continue to grow and could be 300K or more. 

Lots of potential drama.

*We live in a community property state and I'm well aware that in the case of divorce most of our investments would be community property and divided evenly.  However, we aren't getting divorced but rather dividing inheritance.

[MaybeBabyMustache]

@Catbert - do you have any concerns of you/your husband needing that money for long term care? What would happen in the event your medical or care expenses exceed your shared and/or individual pots of money? Given how expensive & unpredictable LTC can be, I always struggle with the idea of giving away part of an "inheritance" before you die.

[AlanStache]

What MaybeBabyMustache said but could you gift the inheritance in successive years to pay lower tax?  Am not sure gifting it at all is correct but just listing options. 

[Captain FIRE]

You’re correct, this has disaster signs all around it. The only one who won’t suffer by this decision is your spouse.  (if he can’t afford the down payment can he really afford the mortgage and upkeep? Also +1 that you might need it later.). Is there any chance this can be walked back? If not, honestly I’d suggest being honest with older brother rather than hoping he doesn’t find out and *documenting* younger’s clear understanding of implications so when older has to fight younger later in court, he’s at least got some solid proof on his side.

[tygertygertyger]

If not, honestly I’d suggest being honest with older brother rather than hoping he doesn’t find out and *documenting* younger’s clear understanding of implications so when older has to fight younger later in court, he’s at least got some solid proof on his side.

Seconding this.

[Sibley]

Catbert, if you go ahead with any version of this, it needs to be with extremely clear and detailed written documentation that both of you stick with forever. Get your lawyer involved. And both sons need to know. Anything less will damage relationships. Even then, it might damage relationships.

[Catbert]

MaybeBabyMustache and AlanStache - I appreciate your concerns about LTC but giving this money away shouldn't be a problem.  Taking a 4% distribution from "our" and "my" accounts would be over 140K a year which is over and above our pensions/ss/rental income which generates more than we currently spend.  If we both ended up in LTC there's a paid off primary residence and rentals that could be sold.

Spreading out between tax years would have helped a bit although I've been doing sizable Roth conversions for the past few years (e.g., 90K last year) so much of this is a substitute for that taxwise.

I can certainly see this causing drama among DH's family, hence the post.  Nobody but my DH would care about having a ruined relationship with his older son.  He is an asshole.  I made clear to him that his older sonwill figure it out at some point.  If push came to shove we could give him an early "inheritance", just not this tax year.  I leave his family handling him.   

[SwordGuy]

@Catbert , this is a horrible mess.  And, as a number of others have pointed out, it's got all the ingredients necessary to get way, way worse.

It's possible that I've read more into your description than it warrants.  Only you will know that.  If I have, my advice is kindly meant.

The dictionary definition of "Inheritance" is:

"Inheritance is the practice of receiving private property, titles, debts, entitlements, privileges, rights, and obligations upon the death of an individual."

You aren't dead.

Your kid isn't ever "entitled" to a damn thing you own, and certainly not an inheritance at this time. 

The only path to progress is to make it clear they need to get their head out of their self-entitled ass and grow up.  If they do that, they'll be a better person and your entire family will be better off because of it.

If they don't, well, it was probably going to be bad anyway.  You may well have kept it from getting worse.

[Villanelle]

At a minimum, he should make crystal clear that this means that the annual Christmas gifts will stop, and that the remaining portion of the account will go to older son, and that--just like younger son's house will grown in value--older son's half of the account will probably grow in value. 

Gosh, this is all just such a terrible idea, and I think in trying to please his son, your husband is actually risking his relationship and legacy with both his sons.  Sometimes, being a parents means saying no and setting a healthy boundary.  But if he's hell bent on doing this, at a minimum he should very clearly lay out all the thing you mention in your post.  Doesn't mean younger son won't whinge about them later on, but at least your DH refer back to the conversation and remind Younger Son that he agree to these terms. 

[Omy]

If you have the ability and want to do it, it's not a terrible idea to give money to kids when they need it (as opposed to when they're in their 50s or 60s and don't really need it.)

I agree that both kids should understand that you'll be giving them their inheritance ahead of time and that you will be giving the gifts in separate tax years so they will net more due to tax reasons. Or do them at the same time and make sure they are getting the net amount so you aren't footing the tax bill. Also, I'd let them know not to expect any more big Christmas checks.

My father did this with me and my siblings in 3 different years for tax reasons. The amounts were much smaller, but we had no problem receiving the gifts at different times. It made sense that the sibling who needed it most received it first.

[RetiredAt63]

When Ex and I bought the wooded lot behind our house, I borrowed some of the money from my father (he offered, I didn't ask).  Basically the only advantage was that we got a better interest rate than the bank would have given us.

Anyway, we signed a formal loan agreement, and it went in with his financial records.  It was very clear that if he were to die while the loan was outstanding, it would be deducted from my share of the estate.  No fuss, no muss, my sister knew.

I also gave him postdated cheques for the payments - no way for me to ask off a payment one month because money was tight.  This was all business.


And it worked.  I think it worked because everything was clear, aboveboard, and not emotional.

The only one who didn't like it was my Ex - I am sure he would have liked to be able to skip a payment every now and then, not have the loan counted against my inheritance if worst came to worst (it didn't, my Dad lived decades after this).  But then my Ex had bad attitudes about money.

All this to say, if your DH decides to do this, it all needs to be very business-like and clear with both sons.  Or are there more children? - "youngest son" implies more than 2, younger son would mean 2.  Anyway, youngest son may not be so interested when all the financial consequences are laid out to both him and the other direct heirs to your husband.  He sound like the type who would like a good chunk (or all) of his potential inheritance now and still expect to get "his share" of the estate later.

And inheritances - I have told DD that she gets a large chunk of mine (it was larger but now grand-daughter is getting some directly).  But she also knows that if I have an expensive last few years, it may not be much so don't count on it.  Seriously, every child should be planning based on the fact that the last few years of a parent's life may be super expensive and the estate may shrink a lot.

Good luck with all this, you are the innocent bystander but it is potentially very messy.
 

[TheGrimSqueaker]

I've always believed that help today is better than money later, if there's a genuine need (not enabling) or if it's the kind of thing that lasts.

My own preference, with regard to my adult daughter and niece, is to provide help when they're young, when they really need it, and when the assistance results in something that lasts. Investing now for a grandchild's education seems to me like an effective use of money, and I'd rather do that and see them benefit from it (or at least have a shot) instead of either squandering the resources on plastic crap or watching someone I love take on unnecessary debt.

The big three-- education, housing, and vehicles-- are increasing in price even faster than the rate of inflation, and one reason why is that it's become commonplace to pay for these things with borrowed money. Whether I (or my heirs) pay with cash or with borrowed money won't change the price point one iota.

[FIPurpose]

Also realize that the younger son will very likely be liable for gift tax and will have to pay an extra 20% himself on that money. Whereas as an actual inheritance would likely owe 0 in taxes on it.

Spending lots and lots of extra money just to give him a couple extra 100k. This whole situation is really saying "not worth it" from every possible angle.

[lhamo]

Also realize that the younger son will very likely be liable for gift tax and will have to pay an extra 20% himself on that money. Whereas as an actual inheritance would likely owe 0 in taxes on it.

Spending lots and lots of extra money just to give him a couple extra 100k. This whole situation is really saying "not worth it" from every possible angle.

In the US the giver is typically responsible for declaring the gift (if over annual exclusion amounts) and paying the tax:

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes