DEAR JEANNE & LEONARD: I'm on the board of a nonprofit organization that helps the homeless. Two years ago, the then-board chairman was diagnosed with cancer, and he passed away last fall. He and I were good friends, and when he first became ill, I helped him find an attorney to update his will (he did not create a trust). During that process, he told me that he was leaving cash bequests to members of his family and that our nonprofit was to receive the proceeds from the sale of his home. He wanted us to use this money to start a day center for our homeless guests so they'd have a place to shower, receive mail and do laundry. Well, 10 months have passed since his death, and his executor, who's his son, has never probated the will nor notified us that we're beneficiaries. What should we do? We do not want to seem like money-grubbers. But this man worked hard to help the homeless, and he couldn't have been clearer about the bequest he was leaving our organization. Do you think we should "push," or just let it go?
DEAR M.K.F.: Push, push, push. Start by contacting his son and politely asking him what's up. If you're not completely satisfied with his answer, ask a lawyer for help. In short, don't let a well-intentioned but misguided sense of propriety deter you from ensuring that your friend's final wishes are honored. It's his executor who should feel sheepish, not you.
DEAR JEANNE & LEONARD: Every year, a friend who has the financial power of attorney for his 100-year-old mother-in-law writes $14,000 checks from her to each of her children and their spouses, and to each of her grandchildren and their spouses. The grandchildren and their spouses then write $7,000 checks to their parents and/or aunts and uncles, such that the total amount distributed to each of the woman's children's families comes out even. Is anything illegal going on here? My friend is unsure.
-- Faithful Reader
DEAR READER: Thank you for your faith. As you presumably know, a person may give gifts of up to $14,000 annually to other individuals without those gifts counting toward the person's lifetime gift and inheritance tax exemption. Wealthier people often regularly give such gifts to all of their heirs, regardless of anyone's age. So there is ample precedent for the gifts your friend is distributing on behalf of his mother-in-law, and ample precedent of grandchildren receiving checks that will in fact enrich their parents. That said, you'd need a lawyer to tell you whether a rebate scheme as systematic as the one you've described is outside the law. All we can tell you is that it's not that far from common practice.
But what about the 100-year-old mother-in-law? Is she aware of what's going on? It sounds to us as if your friend must be passing out around $100,000 a year, if not more. Unless there is ample evidence that his mother-in-law approves of his generosity with her money, something more concerning than dodging taxes may be occurring.
Please email your questions about money, ethics and relationships to
HomeStyle on 11/11/2017
Print Headline: MONEY MANNERS