Bad Mistakes

[SMW71]

What is the name of your state? Illinois


My grandmother died in November of 2004, after a long illness. My father had had power of attorney for several years prior to that. After she died, he immediately divided up all her funds into 4 equal parts and distributed them to himself and his 3 siblings. He didn't go through probate or consult a lawyer or think about income tax or anything like that (I guess he just wasn't thinking clearly). Now she's being hit with a $12,000 income tax bill from her annuities and stuff like that, and there are no funds left with which to pay it, as they've all been divided and distributed already. Is there anything he can do now, to rectify the situation? Will there be any legal ramifications in terms of how he went about doing things?

 

[GaAtty]

GaAtty

Well, in the first place, your father may not be as stupid as he first appears, but rather crafty and somewhat disdainful of the law. The power of attorney was ineffective as of the moment your grandmother died. I assume she didn't have a will, since you didn't mention one. Therefore the minute she died, she had an intestate estate. By law, NO ONE BUT THE ADMINISTRATOR of that estate had the legal authority to do the first thing with any of ther property or money. Of course, your father just ignored that little detail. Then you mention that "she is being hit with a $12,000 income tax bill." Let's correct that. SHE is not being hit with it at all, since she is not here. Her estate might be, however, there is not an administrator for the estate, since none of the kids attempted to be appointed administrator. So who exactly is the IRS sending the bill to? They can't collect from someone deceased (even the IRS can't do that), and they can't collect from an adminstrator who doesn't exist. Interesting problem. Let your father solve it since he decided he could flout the law by playing administrator when he wasn't really appointed.