Q: My grandmother left a nice inheritance of about $40,000 for my father. She left her house to my uncle.
My father has been in so much in the past that my grandmother put my uncle as an overseer on my father’s bank account to ensure he wouldn’t blow the $40,000.
My father was locked up for two years a day before my grandmother died and my uncle is now telling my father that the $40,000 that was supposed to be his was used to pay the taxes on the house that was left to him.
This is so unfair, especially since my uncle has been renting this home for the last two years. If he couldn’t suck up the taxes from rent and using his own personal money, then he should have sold that house altogether.
Is it legal for him to use my father’s inheritance money to pay taxes on that home? My father just got out of jail and needs this money to get a fresh start.
He’s always been around for my grandmother and he deserves the inheritance money, just like my uncle deserved the house and van. Thanks!
A: It sounds like your uncle used his power of “overseer” to enrich himself at your father’s expense. Your father needs to speak with an attorney to see what can be done to enforce the provisions of the will, or what options he has now to make his brother return his inheritance to him.
When your father sits down with an attorney to review the situation, the attorney can look to see what happened with the estate of your grandmother. While it’s possible that there might be a legitimate reason to withhold funds from your father, it’s also possible that your uncle has taken advantage of the situation.
Based on the limited information from your letter, it’s doubtful that your grandmother’s estate owed taxes to the federal government upon her death. If your grandmother died this year, she would owe no federal estate taxes upon her death. However, if your grandmother owed other taxes or debts prior to her death, those debts would have to be settled from the cash that she had on hand at the time of her death.
There are situations in which cash that is on hand at the time of the death of a loved one is used to pay off debts of the estate and the estate is left with no cash but some assets. If that was the case, your uncle might end up owning the home upon settling the debts of the estate and there would be no cash left for your father.
Given this possibility, you can see why proper estate planning is important. If your grandmother could have anticipated this situation, your grandmother could have required that the home be sold and that the proceeds of the sale of the home then be split between your father and your uncle.
However, without more information and investigation, you’ll have to determine whether your uncle had the right to use the cash or not.