Advance on Inheritance?

[OldShooter]

It's shameful for family to start wrestling for money and property before a body has cooled at the morge, but trying to grab $$ even before person is deceased, that's a whole new level. I guess possible to take a share of the inheritance, since person is still living the "estate" value is $0, so half of $0 is still $0. [emoji3]

Actually, this kind of greed is quite common. DW retired as an SVP in megabank investments and trust; here is one thing she heard fairly frequently from someone in her client's family:

"Gee, mom has really deteriorated and she really is not too aware of what is going on around her. Don't you think it would be OK to move her from that expensive private room into a shared room?"

DW's response: "Your father set up this trust to ensure that your mother would be comfortable for the rest of her life. That is the purpose of the trust. No, we are not going to move her."

 

[ncbill]

POAs unfortunately get abused all the time.

Probably for the above reason the POAs I've used (drafted by elder lawyers) have all specifically prohibited any gifting to the attorney-in-fact.

 

[marko]

Greed or not, it is the obligation of the POA to work on the mom's behalf, protect her assets and implement her wishes. That is the whole point of a POA! The POAs sole responsibility is to the mom.
I'm surprised this question is even posed. Wow indeed!

Wow, just wow.
As others have said, Mom can gift, but kids can't take.
Mom could live more than 10 years and need more expensive care as time goes on.

If this POA and sister were in my family, I certainly would tell them to back off. Greed at its worst. My opinion only.

 

[Gill]

It is not unusual for POA's to specifically permit annual exclusion gifts because this can benefit the principal by reducing the eventual taxable estate.
Gill

 

[Chuckanut]

This sounds like a great way to cause bad feelings between the heirs.

If mom gifts one person a chunk of cash, that comes out of her total estate, therefore out of everybody's inheritance. Do you really want to participate in starting a family feud?

 

[gauss]

Just thinking out loud here, but:

If Mom is competent, couldn't the parties involved ask for a gift?

If Mom is not competent, perhaps a Conservator, overseen by the court , could be appointed.

If the POA is trying to find out if they can pull a "fast one" on Mom without her consent that seems like they are setting themselves up for future legal jeopardy.

 

[Souschef]

I have a similar situation. I have an account with each son getting 50%. One son has asked for an advance for a down payment on a house.
I am OK with that, as it is a relatively small amount. I told him I would change the beneficiary so the other son will inherit the other half.
I am OK with this, as he needs it now, not when I die.

 

[The Cosmic Avenger]

I have a similar situation. I have an account with each son getting 50%. One son has asked for an advance for a down payment on a house.
I am OK with that, as it is a relatively small amount. I told him I would change the beneficiary so the other son will inherit the other half.
I am OK with this, as he needs it now, not when I die.

Yes, but YOU are the one making the gift and changing the account to "rebalance". That is not unusual or problematic, but the original post talks about the POA/heir making that decision themselves, which is very problematic, legally and ethically.

 

[Car-Guy]

I was named as a future executor in a will for an estate and I did it. Well sort of... Another future heir was in desperate need of money for basic living expenses. So I loaned this person the needed cash out of my own pocket, with the understanding they would pay it back and knowing full well they would not be able to until the inheritance was distributed at some time in the future. That is all done and over now.

Even now I'm "sort of" doing that again with "my estate". Rather than make my DD wait until I die to inherit and enjoy my estate, I'm gifting the max non taxable amount to her each year. At least this way I get to see her benefit and enjoy some it while I'm still around.

 

[ERD50]

I have a similar situation. I have an account with each son getting 50%. One son has asked for an advance for a down payment on a house.
I am OK with that, as it is a relatively small amount. I told him I would change the beneficiary so the other son will inherit the other half.
I am OK with this, as he needs it now, not when I die.

Yes, but YOU are the one making the gift and changing the account to "rebalance". That is not unusual or problematic, but the original post talks about the POA/heir making that decision themselves, which is very problematic, legally and ethically.

Yes, some people seem to be missing this important distinction, or are just commenting on their own situation, not the OPs?

Also, to Souschef - I didn't really understand your "I told him I would change the beneficiary so the other son will inherit the other half."? Other half? Of what? Change beneficiary to who?

Something to consider - whatever $ amount you give to one son, give an equal amount to the other son at the same time. Due to inflation, or other opportunities that your other son may be able to take advantage of (and maybe he hasn't talked to you about those), it really isn't treating them equally if one gets an advance now, and the other gets the same $ amount later.

"Fair" is in the eye of the beholder, and may be seen differently by different people at different times. Equal is arithmetic.

-ERD50

 

[Badger]

I had a brother who had POA and was writing checks and gifting to his children, grandchildren, and a few charitable (?) organizations he was involved with. My sister and I found out and had to hire a lawyer to get it to stop and for him to return most of the money back to the trust.


Cheers!

 

[MarieIG]

I had a durable POA for DF. It was drawn up so as to allow for the disposition of all assets. I would only have disposed of HIS assets if I needed the money for his care.

Otherwise, I was joint on his bank accounts and used that to pay for most expenses. I also liquated an account which I inherited from DM to pay for home care when DF needed it.

I believe I used the POA a total of one time. When DF's bank was undergoing construction and closing their safety deposit boxes. DF couldn't get there, so I went down and closed the box and moved the items to a box in another bank I had with DF.

 

[dtbach]

I was named as a future executor in a will for an estate and I did it. Well sort of... Another future heir was in desperate need of money for basic living expenses. So I loaned this person the needed cash out of my own pocket, with the understanding they would pay it back and knowing full well they would not be able to until the inheritance was distributed at some time in the future. That is all done and over now.

Even now I'm "sort of" doing that again with "my estate". Rather than make my DD wait until I die to inherit and enjoy my estate, I'm gifting the max non taxable amount to her each year. At least this way I get to see her benefit and enjoy some it while I'm still around.

Lovely! My father did this with us kids in his last few years. He always said that "it is better to give with warm hands, rather than cold"

 

[Sunset]

I have a similar situation. I have an account with each son getting 50%. One son has asked for an advance for a down payment on a house.
I am OK with that, as it is a relatively small amount. I told him I would change the beneficiary so the other son will inherit the other half.
I am OK with this, as he needs it now, not when I die.

You are free to do whatever you want with your money, however it may not be fair (worth 50% to each).

This strikes a personal note with me as a similar thing happened in my life, and it wasn't fair.


Issues I see with this are:
You may end up spending the money in that account (ex cancer drug costs, LTC, etc)
The benefit to the one now may drastically outweigh the value of the remaining 50% in X years.
IF you don't actually need the money, why not gift both now ?
The one not getting the money, probably feels a bit put out by missing out on getting a gift.
Are you rewarding someone who enjoyed blowing their money so they cannot afford what they now want ?

 

[Souschef]

You are free to do whatever you want with your money, however it may not be fair (worth 50% to each).

This strikes a personal note with me as a similar thing happened in my life, and it wasn't fair.


Issues I see with this are:
1You may end up spending the money in that account (ex cancer drug costs, LTC, etc)
2The benefit to the one now may drastically outweigh the value of the remaining 50% in X years.
3IF you don't actually need the money, why not gift both now ?
4The one not getting the money, probably feels a bit put out by missing out on getting a gift.
5Are you rewarding someone who enjoyed blowing their money so they cannot afford what they now want ?

1.The money in that particular account is a very small fraction of our NW
2.I do not think so
3. Because they are both gifted from my RMD annually.

4. My dealings with each son are totally separate
5. My son specifically requested the money as down payment on a house. He had a hard time asking for it as he normally does not accept help from others.

 

[shardie1]

Looks to the POA Document

If it is a well written Power of Attorney, the document itself will contain language allowing (or not allowing) the agents to make gifts to themselves.

 

[CardsFan]

A little tangent;

We can always tell when DMIL has gifted something to one of the other two sisters. She will insist on buying something for us, something useful that we have talked about. Not big money $100 to $1,000. I used to argue with her, saying we did not need it. Eventually I got to the point: I know she can afford it. It makes her feel good. Take it with a smile.

I also take the time to do the minor repairs for her that FIL used to do (gone 18 years now). Flapper valves in the toilet were the latest. She gave me $90 to buy the parts. I gave her about $85 back.

 

[CRLLS]

We are not in this situation although I see a time when it might apply to us. Would not a Promissory Note cover the imbalance between one heir receiving $$ earlier than others? That Note could be part of the estate as money owed to the estate. It would be eventually paid from the debtor's share of the trust/will when that time comes? If there is not enough $$ to cover the payment of the note, then that person would owe the other heirs or creditors in the case of a will, their share?

 

[tps7742]

Wow, obviously the mother chose the wrong person to be power of attorney to represent her(self).

 

[mckittri2000]

She can gift whatever she wants but anything over 15000 and she will have to file a form 709 with her taxes.

 

[KarenF]

Bluntly, there is no such thing as an advance on inheritance. The person can give gifts, if they are alert without dementia and understand what they are doing. Otherwise it is stealing. She needs to keep that money in case she needs it - it is hers. Speaking as the trustee and holder of my mom's POA - I only ever used her money for her care, and the best care possible.