Sibling will not take inheritance

[pjm-7]

What do you do about a sibling that will not take his portion of his inheritance?

Dad died last year. When handling accounts most were set with TOD/beneficiaries for ease of handling at the end. There was no real estate, trusts and it was a small/moderate sized estate. Upon dad's passing a couple of things could be handled by the executor. For the TOD/beneficiary accounts I made the calls to secure paperwork for all beneficiaries. Everything has been done except . . . this one.

I have tried emphasizing the importance of cashing the small IRA before the end of the year to avoid any tax penalties. There is a mutual fund that needs to be re-registered or cashed. The mutual fund requires a sig guarantee.

These two things are easy enough. This individual is well educated and has the ability to handle financial transactions. He lives over six hours from any of us so a quick visit is not easy. He just won't complete the paperwork. Any suggestions to get this done before the end of the year?

 

[ivinsfan]

What do you do about a sibling that will not take his portion of his inheritance?

Dad died last year. When handling accounts most were set with TOD/beneficiaries for ease of handling at the end. There was no real estate, trusts and it was a small/moderate sized estate. Upon dad's passing a couple of things could be handled by the executor. For the TOD/beneficiary accounts I made the calls to secure paperwork for all beneficiaries. Everything has been done except . . . this one.

I have tried emphasizing the importance of cashing the small IRA before the end of the year to avoid any tax penalties. There is a mutual fund that needs to be re-registered or cashed. The mutual fund requires a sig guarantee.

These two things are easy enough. This individual is well educated and has the ability to handle financial transactions. He lives over six hours from any of us so a quick visit is not easy. He just won't complete the paperwork. Any suggestions to get this done before the end of the year?

Can you clear up your thread title, is your sib refusing to take the money or not following through on the paperwork?

 

[OldShooter]

Why is this your problem? Do the penalties go to you and the money to him? Unless that's the case, I would forget about it.

 

[pjm-7]

Not following through on the paperwork is a way of ignoring his inheritance. Those of us who have completed the process are concerned that if something happens to him (he is the oldest sibling) we would have to straighten out the mess later.

 

[OldShooter]

YMMV, of course, but I would not screw with it. In your worst case, just wait until the assets end up with the state unclaimed property department and his heirs can decide whether getting the money is worth the effort. At that point it is probably pretty simple; a death certificate and a copy of the will or of whatever comes out of intestate proceedings.

 

[audreyh1]

The IRA named beneficiaries, I assume, in which case you as executor are not responsible for it.

If you are also on the TOD, well then it’s probably a situation where nothing gets transferred to an inherited account unless all the beneficiaries have turned in their paperwork. That’s a royal pain if you can’t get your share due to a sibling not doing the paperwork.

 

[Aerides]

Is it possible his neglect of the inheritance is his grief talking?

Or the opposite, burned bridges he'd rather not try to walk back over, guilt at taking money now?

Either way, I'd perhaps engage the one sibling that is closest to him to try to have a chat if this really needs to get resolved...and then, welp, a family law attorney.

 

[RetMD21]

The IRA named beneficiaries, I assume, in which case you as executor are not responsible for it.

If you are also on the TOD, well then it’s probably a situation where nothing gets transferred to an inherited account unless all the beneficiaries have turned in their paperwork. That’s a royal pain if you can’t get your share due to a sibling not doing the paperwork.

I had assumed that if there were x beneficiaries the each one would bet their 1/x share when they completed their own paperwork

 

[Sunset]

OP - have you talked to this sibling , if it's just been mail, perhaps they didn't get it ?

Perhaps the sibling simply does not want the money, if so then is there a form they can sign to refuse it, so it can be split among remaining siblings ?

This is such a weird situation, mental illness could be an issue. Perhaps if the person is going through a divorce, they are thinking to delay the income, so less is at risk of getting split with the ex. ?

 

[audreyh1]

I had assumed that if there were x beneficiaries the each one would bet their 1/x share when they completed their own paperwork

No.

In my siblings' case, the brokerage firm told me they could not release the funds to any TOD beneficiary until they had received the paperwork from all beneficiaries. And they did not.

It took a while because two were overseas and had to jump through major hoops to get papers notarized (US embassy didn't have staff due to pandemic) and sent internationally to the brokerage. Funds were released to new accounts simultaneously once all paperwork had been received.

 

[Sunset]

No.

In my siblings' case, the brokerage firm told me they could not release the funds to any TOD beneficiary until they had received the paperwork from all beneficiaries. And they did not.

It took a while because two were overseas and had to jump through major hoops to get papers notarized (US embassy didn't have staff due to pandemic) and sent internationally to the brokerage. Funds were released to new accounts simultaneously once all paperwork had been received.

Wow.... This has personal relevance, as I could see a relative holding up everything because of what I'm considering some mental illness.

Maybe I'll change a few equal things to single beneficiary rather than have them all equally shared.

 

[audreyh1]

It may depend on the brokerage/financial institution.

 

[Palmtree]

If it was me, I would see if you could hire an attorney or legal aid in his city. Have then set up an appointment with him and handle it in person.

 

[L Carlisle]

I have had this same situation a few times with my older brother. He is simply the laziest person I know. I ALWAYS take the paperwork to his home, explain what is going on with it, then make him sign it in front of me or take him to a notary. Otherwise nothing gets done.

 

[pb4uski]

Wow.... This has personal relevance, as I could see a relative holding up everything because of what I'm considering some mental illness.

Maybe I'll change a few equal things to single beneficiary rather than have them all equally shared.

Or split the account into x accounts with one beneficiary each so an intranisgent beneficary doens't gum up the works for all the others.

 

[pb4uski]

I wonder at what point if the administrator doesn't get paperwork they consider that the unrespondent beneficiary has disclaimed that inheritance?

OP, if your brother disclaiming the inheritance or just being uncooperative?

I never would have thught this would be an issue but I guess it isn't the first time.

https://www.irahelp.com/forum-post/18607-uncooperative-beneficiary-and-uninformed-bank

https://miorinilaw.com/global_pictures/Uncooperative_Beneficiaries_-_NEW.pdf

https://www.avvo.com/legal-answers/how-long-can-a-beneficiary-heir-hold-up-the-probat-1566139.html

 

[Sunset]

Or split the account into x accounts with one beneficiary each so an intranisgent beneficary doens't gum up the works for all the others.

I was thinking of how there are about 10 CD's each with multiple beneficiaries, I can simply change each CD to have just one beneficiary.

What a weird issue, never would have thought of it.

 

[pb4uski]

I would not have thought of it either.

 

[Dash man]

I would not have thought of it either.

That’s why I’m a strong believer in trusts!

 

[Bamaman]

Time for a road trip to obtain needed signatures.

Some people just don't attend to their business.

 

[statsman]

That’s why I’m a strong believer in trusts!

Trusts for taxable and property assets? Absolutely. Trusts for tax-deferred accounts? Not what we were advised to do.

 

[Dash man]

Trusts for taxable and property assets? Absolutely. Trusts for tax-deferred accounts? Not what we were advised to do.

We do have trusts for our IRAs. It provides protection from divorce or lawsuits. If the boys want to take the funds out, it’s up to them.

 

[jollystomper]

Not following through on the paperwork is a way of ignoring his inheritance. Those of us who have completed the process are concerned that if something happens to him (he is the oldest sibling) we would have to straighten out the mess later.

Have you spoken to the sibling and raised this issue?

 

[gauss]

My thoughts on the situation:

#1) If you and all the other beneficiaries have received your funds, then I do not see it as an issue

#2) If something happens to your sibling, it would be up to his estate to figure it out, not you. Unless of course, you have agreed to be executor./Personal Representative of his/her estate (but even then you can, legally, refuse to accept the court appointment).

#3) I suspect, but am not certain, that if the funds sit there unclaimed for a while they would eventually be escheated to the state as unclaimed property. This does not mean that the state gets ownership of the property, but rather that it becomes a public record that this person has funds coming to him/her and that he could come forward to claim it or a representative of his estate (if an estate exists).

4) If the fund in question is a traditional IRA, then in general RMD's will be due from your sibling. If you Dad died in 2019, then the old laws on inherited IRAs would still be in effect (ie stretch IRA). Note that no RMDs of any kind are required in 2020 due to Covid-- you sibling would have until 2021 to take the first RMD. As such, there would be no tax penalties, IMHO, if this is not claimed before the end of 2020 Perhaps your sibling understands the law better than you think he does. My DMIL passed in 2019 and I am dealing with a similar issue except that we are talking about a 401k and the new administrator wants to release the funds to the estate, not to the beneficiary, disregarding the plan document rules that were in effect on the date of death, but that is another story.

Note I am not any type of professional with regards to this, but I have administered a couple of estates and like to understand the details.

-gauss