Inheritance Dispute Between Siblings

[davidvel]

As a test -- I suggested my son inquire --
What if HE wants to buy her out -- could he have the same terms as she has proposed to him? She replied -- no, that would turn into a bidding war.

To me, that shows she is attempting to get a better deal than she is willing to give to him.

She can't see it that way.

And this shows what I and other have been saying to those trying to find a fair outcome: SHE doesn't want a fair or equal division. She wants the better deal. Brother needs to get aggressive and demand she complies with the trust and law.

 

[ScoopKona]

You should have your son confirm this in the terms of trust, as it is highly unusual.

I wouldn't worry too much about it. 0.01% of $1 million is a hundred bucks. If it was 1%, then I'd want to see the paperwork which says this.

 

[jorcus]

Not like you need any more advice on the subject but my best suggestion is to not get involved. They are adults and whatever happens it's between them. We went though something similar a few years ago. My wife and her sister inherited a house from a sister that passed away. My wife's sister wanted to give the house to her daughter and the daughter would buy out the other half from us. So the question of how much came up. My wife shoots a number out off the top of her head. After she told me what happened I thought the number was low so she went to talk to her sister about it and sister got mad about even discussing a different price. In the name of peace and harmony we just let it go and were thankful for what we were given. If your kids try to suck you in just advise it's between them and you love them both and will not take sides.

 

[Ken555]

I haven’t read every post, but given that it’s family… I would suggest considering hiring an outside objective mediator to assist, ideally someone knowledgeable about inheritance laws and real estate. IMHO, it’s worth a little in such consulting fees in order to amicably resolve family financial issues without resorting to the courts, etc.


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[davidvel]

I wouldn't worry too much about it. 0.01% of $1 million is a hundred bucks. If it was 1%, then I'd want to see the paperwork which says this.

I doubt its .01%, but the trust will say if it is.

 

[jabberwocky]

Well said, I like it enough to copy and paste and email to them.
Is that okay with you?
(I've already told them I have posted the question here.)
Thank you.

Absolutely, feel free to share with them.

Hopefully this can be resolved amicably.

 

[b2bailey]

I wouldn't worry too much about it. 0.01% of $1 million is a hundred bucks. If it was 1%, then I'd want to see the paperwork which says this.

I think it's $10,000 per million -- I must have put decimal in wrong place.

 

[ScoopKona]

I think it's $10,000 per million -- I must have put decimal in wrong place.

That's 1%

 

[geist1223]

You should have your son confirm this in the terms of trust, as it is highly unusual.

Many States have a % fee for Executors. But then the same laws normally require the Executor to Post a Bond = to the estimated value of the Estate. This is so if the Executor does anything shady or underhanded the other Heirs can File against the Bond. Similar requirements for Successor Trustees. In many Wills and Living Trusts the entitlement to a Fee and the required Bond are both waived.

It is getting close to where the Brother should File with the Court to challenge the Sister as Executor/Trustee as she is trying to personally benefit from her position.

 

[b2bailey]

I haven’t read every post, but given that it’s family… I would suggest considering hiring an outside objective mediator to assist, ideally someone knowledgeable about inheritance laws and real estate. IMHO, it’s worth a little in such consulting fees in order to amicably resolve family financial issues without resorting to the courts, etc.


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THIS is what I have proposed. How do you go about finding such a person?

 

[b2bailey]

First, I want to thank all who have expressed opinions and concerns.
I mentioned to my daughter that this discussion has been enlightening to me.
(I have not revealed to her that she is has not been characterized in the same manner that she sees herself.)

The funny thing...
She told me that any opinions expressed on TUG are not based on any of you knowing the "backstory" to all of this. I've tried to explain that from a legal point of view -- none of the back story is relevant to the proceedings.
Story #1 - she has been bitter for years that Brother and Sig Other live in my house, located in a nearby city. She feels they have benefited from paying below market rent. Not true, but lets say she is correct.
Story #2 - Daughter was much better at nurturing relationship with her father throughout the years. Son did not visit Dad for 2 years before his death.
I tell her she may receive a reward in Heaven.

But neither of the above have any bearing on her responsibility as Executor of her father's estate.

My guess is that this additional information would not cause any of you to alter your responses.

 

[ScoopKona]

My guess is that this additional information would not cause any of you to alter your responses.

Nope.

This reminds me of one of the two inheritances I watched go completely off the rails. Three children. Splitting one house. No other assets. Two children are "free spirits" without a pot to urinate in. The other is a lawyer.

As soon as the will was read (even split among all three), the two "free spirits" lawyered up. They wanted more than their 1/3 share because the lawyer was already doing well. Their logic was he didn't need as much, so socialism!

By the time the dust settled, there was almost nothing left, and the attorneys walked away with most of it in the form of billable hours.

The two free spirits still don't have a pot to urinate in. And the lawyer is still a lawyer. And now none of them speak to each other.

 

[jabberwocky]

Doesn’t change my opinion at all. The wishes as expressed in the will must be honored. If your late husband wished to rebalance things it could have been done previously.

This isn’t the time to settle scores for perceived slights.

And I’ll just point out that your daughter not only has a duty as the executor, but as a CPA she also has an ethical obligation to act impartially and honestly with any funds that are entrusted to her.

 

[Talent312]

You could say to her:
I may not have told you this before, but you need to know...
Life isn't fair. We know this becuz, if life was fair, then...
_This_ is what fairness would be, and that just ain't right.
-- Source: George Carlin

 

[davidvel]

Many States have a % fee for Executors. But then the same laws normally require the Executor to Post a Bond = to the estimated value of the Estate. This is so if the Executor does anything shady or underhanded the other Heirs can File against the Bond. Similar requirements for Successor Trustees. In many Wills and Living Trusts the entitlement to a Fee and the required Bond are both waived.

It is getting close to where the Brother should File with the Court to challenge the Sister as Executor/Trustee as she is trying to personally benefit from her position.

This is a trust not a will.As to this issue she is a trustee not executor (probably an executor of pour over will but not pertinent to this discussion.) Any compensation must be set forth in the trust. No bond required.

 

[davidvel]

Doesn’t change my opinion at all. The wishes as expressed in the will must be honored. If your late husband wished to rebalance things it could have been done previously.

This isn’t the time to settle scores for perceived slights.

And I’ll just point out that your daughter not only has a duty as the executor, but as a CPA she also has an ethical obligation to act impartially and honestly with any funds that are entrusted to her.

She has duties as trustee as to this issue, but unless she has undertaken to act as a CPA and entered into an agreement to do so, that status has no bearing on her obligations.

 

[davidvel]

LOTS of mis-information, improper terminology, uninformed comments, and flat-out uninformed commentary in this thread. Hopefully everyone reading takes it for what it is, and doesn't rely on it for any important decisions.

 

[jabberwocky]

She has duties as trustee as to this issue, but unless she has undertaken to act as a CPA and entered into an agreement to do so, that status has no bearing on her obligations.

i think we’ll have to disagree on that point and I don’t think we want to get into a nuanced debate over arcane practice requirements on TUG.

Perhaps it is different in California - but one has to be mindful of your behavior so you aren’t seen as acting as a CPA in this context. The absence of an engagement letter won’t necessarily protect you.

 

[BJRSanDiego]

Many States have a % fee for Executors. But then the same laws normally require the Executor to Post a Bond = to the estimated value of the Estate. This is so if the Executor does anything shady or underhanded the other Heirs can File against the Bond. Similar requirements for Successor Trustees. In many Wills and Living Trusts the entitlement to a Fee and the required Bond are both waived.

It is getting close to where the Brother should File with the Court to challenge the Sister as Executor/Trustee as she is trying to personally benefit from her position.

I learned first hand that if the estate goes into Probate in CA, the state has determined what the Probate attorney fee will be as well as what the Executor's fee will be. Both are spelled out by law. 4% of the first 100K, 3% of the next $100K, and 2% of the next 800K and 1% of the next $9 mil. The executor fee is the same as the Probate attorney's fee. So on a $1 mil estate, the executor fee would be $46k (according to my Google search). https://www.google.com/search?q=wha...0l5j33i299.17870j1j7&sourceid=chrome&ie=UTF-8

This info is readily available on-line.

Hopefully, your daughter doesn't have to go through Probate.

 

[davidvel]

I learned first hand that if the estate goes into Probate in CA, the state has determined what the Probate attorney fee will be as well as what the Executor's fee will be. Both are spelled out by law. 4% of the first 100K, 3% of the next $100K, and 2% of the next 800K and 1% of the next $9 mil. The executor fee is the same as the Probate attorney's fee. So on a $1 mil estate, the executor fee would be $46k (according to my Google search). https://www.google.com/search?q=wha...0l5j33i299.17870j1j7&sourceid=chrome&ie=UTF-8

This info is readily available on-line.

Hopefully, your daughter doesn't have to go through Probate.

B2bailey confirmed above that title to the house was judicially recognized (via Probate Code 850) to be in the trust . Trusts disputes are handled by the Probate Court in most instances (although not all). The trust will never have to go through probate, because trusts do not "go through probate."

Even though court actions relating to trusts (as would be the case here) are handled by Probate Court, THIS IS NOT THE SAME as going through probate for a will, or intestate estate. There is no probate for trusts. There is no executor of a trust. There is no executor fee. There is no probate attorney fee or other probate "tax." This is the whole point of using a trust, YOU AVOID PROBATE.

If you're interested in learning about CA law relating to trusts, see below.
https://leginfo.legislature.ca.gov/...itle=&part=&chapter=&article=&nodetreepath=12

 

[davidvel]

i think we’ll have to disagree on that point and I don’t think we want to get into a nuanced debate over arcane practice requirements on TUG.

Perhaps it is different in California - but one has to be mindful of your behavior so you aren’t seen as acting as a CPA in this context. The absence of an engagement letter won’t necessarily protect you.

I'm guessing US and especially California law may be a bit different than Canada law.

 

[lynne]

After reading these posts, I am forever thankful that my brother and I did not have any of these issues when our mom passed and I was named executrix in the will. We agreed to sell the family house and split everything down the middle. I did not take any fees as it did not seem necessary. We each took whatever sentimental items and for everything else, we had her friends and our friends and family to the house to take whatever spoke to them. Everything else went to charity. Our attorney was amazed how easy it was to settle the estate between us.

Losing a sibling over stupid stuff is just not worth it.

 

[rapmarks]

After reading these posts, I am forever thankful that my brother and I did not have any of these issues when our mom passed and I was named executrix in the will. We agreed to sell the family house and split everything down the middle. I did not take any fees as it did not seem necessary. We each took whatever sentimental items and for everything else, we had her friends and our friends and family to the house to take whatever spoke to them. Everything else went to charity. Our attorney was amazed how easy it was to settle the estate between us.

Losing a sibling over stupid stuff is just not worth it.

And this thread has me worried about what will happen when I pass regarding the house I own that my daughter is living in.

 

[T_R_Oglodyte]

Your reply hits at crux of matter -- on all 3 points.
My relationship with daughter is tenuous at best -- but she is mother to my 3 grandchildren. It I tell her that I feel she's being greedy -- Lord have mercy.

Why do you need to say anything to either of them? This isn't your battle; why are you getting involved. I think you can step back and tell them to solve the issue between themselves as adults. If it blows up their relationship, so be it. If that's all it takes, the relationship probably was going to detonate sooner or later anyway; this spat is a symptom, not a cause.

 

[T_R_Oglodyte]

Having scanned through 4+ pages of responses since I visited the thread yesterday, my thought is ....

this isn't about the house. This is more about some deeper issue between the siblings. The house is simply the symptom. Rational approaches to how to solve the issue of the house don't fly, because the dispute fundamentally isn't about the house.

If one of them, for whatever reason, feels that it is essential that they get the upper hand in the deal, there is no "acceptable" solution that does not encompass that concern. Conversely, if it is essential for the other party to feel that they not be taken advantage of, there is no "acceptable" solution that does not encompass that concern.

Think in terms of Venn diagrams.. If there is no overlap in the two circles, there is no possible solution that fits both parties, and all efforts to find a solution will ultimately go to naught.

As I posted above, just stand back and let the situation play out, with little to no involvement on your side.