My mother died. Her will called for my brother to be her estate representative. He didn't go through the court system and set up and estate. He put her money in his account then disbursed it to the heirs as taxable. I haven't cashed the checks. It is my understanding that if this where handled through the court, I could receive up to 1.5 million without paying taxes. He don't listen. What is my next move!?
This raises several questions. How was he able to move her money into his account without a probate? Was he a joint owner on the account? If he did it solely in his capacity as an authorized signer, this is clearly incorrect. In any event, none of the payments to you should be taxable. These are inherited funds regardless of how they were distributed to you, so they are not reportable to the IRS. If your brother will not listen, you need to speak with an estate planning attorney who can advise you of your rights and speak on your behalf with your brother.
If your brother acted as executor but deposited estate assets into his personal soccer, then he is clearly acting improperly. You have two options, both of which will require an attorney: (1) Seek to have him removed as executor; (2) Demand an accounting. More likely, both remedies can simultaneously be sought. Get in touch with a local attorney as soon as possible.
Good luck to you.
Michael S. Haber is a New York attorney. As such, his responses to posted inquiries, such as the one above, are limited to his understanding of law in the jurisdiction in which he practices and not to any other jurisdiction. In addition, no response to any posted inquiry should be deemed to constitute legal advice, nor to constitute the existence of an attorney/client or other contractual or fiduciary relationship, inasmuch as rendering legal advice involves the ability of the attorney to ask appropriate questions of the person seeking such advice and to thus gather appropriate information. In addition, an attorney/client relationship is formed only by specific agreement. The purpose of this answer is to provide the questioner with general information, not to outline specific legal rights and remedies.
My condolences. I'm sure this is a difficult time for your, and worrying about legal issues does not make it any easier!
An heir or anyone else interested in the estate can file a probate case; it doesn't have to be the person named as executor in the will. The court may still appoint the person named as executor even if that isn't who filed the probate, but under the circumstances, the court might not.
In case you are concerned about it, the court will generally order the legal fees, court costs and other expenses involved with the probate and distribution of the estate to be paid from the assets of the estate.
Even if you don't want to file a probate case yourself, I still strongly recommend that you consult an experienced probate attorney privately to make sure your interests are protected. You have too much at stake and there are too many things that can go wrong to leave anything to chance.
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I echo the questions and concerns of Mr. Shiles. There is something that needs investigation if your brother is moving around large sums of money that belongs to the estate.
I also echo Mr. Shiles conclusion that the estate proceeds should not be considered "income" for tax purposes. However, there is a possibility of estate tax liability. The "unified credit" in 2016 is $5.45 million. This is the point where you have to start paying estate taxes. But the unified credit may possibly include gifts that were made during your mother's life, and so part of the credit may have already been used. Someone needs to look into this if there is a possibility that the total estate is large enough to trigger taxes. You may need to file an estate tax return even if the estate is not large enough for taxes to be triggered.
Finally, if there is ANY real estate involved in the estate, a probate needs to be pursued. Property can only be transferred by deed or by court order - so a probate needs to address any real estate the decedent owned.
To answer your question directly - your next move is to retain an attorney to help you with your specific issues.
You should sit and speak with a probate attorney at length but please remember that one year after your mothers death is the deadline to do anything
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