Defrauding a Will?

[UnhappySibling]

What is the name of your state (only U.S. law)? CALIFORNIA

My sister & I are the sole beneficiaries of our father's will. He left everything in equal shares; the only difference is I get my share now, and my sister (who has had finincial difficulties in the past) does not get hers until she turns 40. Until then it will be in a trust under the supervision of a trustee, which she can withdraw but under supervision of the trustee. She is furious about being treated differently & wants to disclaim her share. She is unmarried with no children. It will automatically go to me, which she then wants me to hand over to her so she can have her entire share now (and has no care about the tax consequences, in fact has asked me to split her tax consequences with her)
Is this even legal?
Thanks.What is the name of your state (only U.S. law)?

 

[FlyingRon]

She can disclaim her share and the money goes to you.
You're under no obligation to give her anything if she does that.
I'm not sure what tax consequences you think you have.
How much money are we talking about?

Spendthrift trusts are not uncommon. I've done exactly the same for my children. The responsible one gets her half outright. The one who will blow it in 30 seconds, is in a similar trust (and I don't even think we put an end date on it).

 

[UnhappySibling]

about 2 million total (so 1 million each), and she wants me to sign an agreement that I will hand over her share once she disclaims. It sounds like something that would land me in jail (defrauding a trust?), and I said I'm not interested in this "deal" which has led to multiple emails requesting the same thing over & over. It's maddening.

 

[OHRoadwarrior]

I would explain her choices are to give you her money or wait for it. Your father set it up that way intentionally. You should not pee on his wishes to please her, when he wanted to circumvent her, without disinheriting her.

 

[cyjeff]

You are not defrauding... but the real question is why you would.

Here is my take... don't sign ANYTHING that requires you to do anything with the money.

Look your sister dead in the eye and tell her that if she disclaims, nothing about your father's wishes will be changed... well, except that you are going to take the costs out of setting up the new trust out of your sister's share.

You don't say how old your sister is... but a nice thing to do would be to give her an immediate portion... say 10%... with the rest held in that trust.

I would also watch my back. A million dollars denied starts looking like enough money for irresponsible people to start doing really irresponsible things.

 

[anteater]

about 2 million total (so 1 million each), and she wants me to sign an agreement that I will hand over her share once she disclaims. It sounds like something that would land me in jail (defrauding a trust?), and I said I'm not interested in this "deal" which has led to multiple emails requesting the same thing over & over. It's maddening.

I don't see anything illegal about it.

But, it will be your money. And, if you hand it over to her, it will be a gift. And, as a gift, you will have to report the amount of the gift greater than $13,000 to the IRS. And, while you will not have to pay tax on the gift immediately, it will use up part of your unified estate tax credit.

 

[UnhappySibling]

She has been in a 'deep dark depression' (her words) since the Will was read, and blames the entire depression on th amendment to the will (the age limitation clause was added a month before my father's death) She says the depression can only be cured by "ridding this amendment" which she interprets as me giving her the money through this disclaiming plan. I know the amendement will always exist no matter what she does to try to erase it, but she fails to see it this way. I also know depression is not "cured" by disclaiming an inheritance. All of her actions since my father's death have only reenforced my beliefs that she is a completely irresponsible individual, not to mention mentally unstable. She has already threatened suicide twice since my father's death, but the suicide is more like a threat if we don't do what she wants.

 

[LdiJ]

She has been in a 'deep dark depression' (her words) since the Will was read, and blames the entire depression on th amendment to the will (the age limitation clause was added a month before my father's death) She says the depression can only be cured by "ridding this amendment" which she interprets as me giving her the money through this disclaiming plan. I know the amendement will always exist no matter what she does to try to erase it, but she fails to see it this way. I also know depression is not "cured" by disclaiming an inheritance. All of her actions since my father's death have only reenforced my beliefs that she is a completely irresponsible individual, not to mention mentally unstable. She has already threatened suicide twice since my father's death, but the suicide is more like a threat if we don't do what she wants.

You honestly cannot do what she wants. It will cause seriously problems for your future estate if you do that...as another poster already explained. However, if she has financial problems and really needs a portion of the money now, you could encourage the trustee to give her enough to cover her immediate needs.

 

[CSO286]

She has been in a 'deep dark depression' (her words) since the Will was read, and blames the entire depression on th amendment to the will (the age limitation clause was added a month before my father's death) She says the depression can only be cured by "ridding this amendment" which she interprets as me giving her the money through this disclaiming plan. I know the amendement will always exist no matter what she does to try to erase it, but she fails to see it this way. I also know depression is not "cured" by disclaiming an inheritance. All of her actions since my father's death have only reenforced my beliefs that she is a completely irresponsible individual, not to mention mentally unstable. She has already threatened suicide twice since my father's death, but the suicide is more like a threat if we don't do what she wants.

Then don't let her bully you into doing this. And frankly, if she's making suicidal statements, let her know you'll be taking such statments seriously and calling medical/law enforcment personnel to have her evaluated. (you know, a 72-hour hold....)

Also remind her that money doesn't buy happiness.

 

[Zigner]

You honestly cannot do what she wants. It will cause seriously problems for your future estate if you do that...as another poster already explained. However, if she has financial problems and really needs a portion of the money now, you could encourage the trustee to give her enough to cover her immediate needs.

OP could also loan the money to sis with a promissory note for repayment after the trust is distributed.

 

[UnhappySibling]

she has no immediate financial needs; her condo is paid for; her car is paid for; she already gets a monthly "allowance" from our other living parent, which goes to who knows what? No outstanding debts. No spouse, no children. And no job. Not a dime in savings. It all stems to her just wanting the money now (even though she would still have access to the trust through the financial advisor/trustee if she left things as is) She refuses to listen to reason, and doesn't give a damn about anyone but herself - especially not me which is evident in wanting/expecting me to split $300k in taxes like it's petty cash. I am married with children, I have my own life & future to protect. I was hoping to nip this plan of her's in the butt by proving it was illegal, but it sounds like maybe it is not illegal after all.

 

[cyjeff]

Nope.. not illegal. You won't be able to hide behind the law.

You will just have to tell her that you won't do it. If she disclaims, you will keep all the money and the only thing she can expect out of you is really awesome Birthday presents.

We all fall into a deep and dark depression when we are slapped in the face with our own denied shortcomings. It is part of the growing up process.

Before you throw too many rocks, did someone pay for YOUR house, are YOU getting an allowance and are YOU working?

 

[UnhappySibling]

my husband and I paid for our house; any money we have received has been put into savings. My husband & I both work.
I've been the responsible one, my sibling the opposite. She's never been told 'no', she's never saved a dime - any time money is given it is spent on luxury items. This is why we were treated differently in the Will. The sad part is my sibling sees no difference between the 2 of us; "we are one and the same" (I quote her words) and seriously believes our father was not of sound mind when he wrote this in the will (I was with him until the end, he *was* of sound mind). It is insulting to insinuate out father had to be crazy or incapacitated to do what he did.

 

[FlyingRon]

Well if she wants to contest the amendment that's up to her. You're obviously under no obligation to thwart your father's wishes which you seem to understand.

 

[cyjeff]

Again...

Refuse to sign anything. Do not promise anything.

Tell her that you are terribly sorry about her deep and dark depression. Tell her to seek help.

Then tell her that you will not be giving her a single penny from the estate. If she disclaims, you will keep it all and spend it on crazy things like real estate, college tuitions and trying to breed a unicorn.

Whatever.

Just tell her that Dad didn't think she was old enough for the money. Her actions lead me to believe Dad was right.

How old is she, anyway?