Can I Take My Mom’s Money If She Is So Incompetent as to Be Unable to Use it or Know?
Filed under: Elder Law, Estate Planning
Dear Mr. Miller:
My Mom is in a skilled nursing facility in California. Not only is her memory completely shot, she really has no idea which way is up. She has about $4 million in the bank. Further, she has several pensions that are paying the bills, so the $4 million just keeps on growing. There is just me and my brother.
I’m handling all of her investments (just the bank account) and paying her bills under her Living Trust . I’m the one dealing with the facility and all of her physicians. Her Trust leaves everything to my brother and me. My brother is not doing anything.
I could really use some of the money now to fix up the house and help with the college tuition of my kids (her grand kids). I’m not looking to take anything away from my brother. When Mom dies we would even up everything so everyone comes out equally. Can I do that?
Sister Wanting Inheritance Now
Legality
Early Inheritance Procedures
Potential Problems
What You Will Owe Your Brother
What if you die before your Mom?
What if your Mom’s needs and the cost associated with them skyrocket?
What if your brother finds out and does not approve?
Talk to an Attorney
Dear Wanting:
Legality: When you ask “Can you do that?” the answer is certainly you have the ability to do so. After all, you have access to the money. Your Mom is not mentally aware to stop you and your brother apparently doesn’t care enough to look over your shoulder. And there is no such thing as the “Probate Police.” So who is going to stop you!
The bottom line, however, is that this is, in most cases, illegal. Some families don’t care too much about that and there are some workarounds.
Early Inheritance Procedures: Actually, if your Mom was aware, there is a procedure for this “early inheritance.” It requires her consent, of course, and your written acknowledgment that the “gift” is to go against your inheritance. Unfortunately, in your situation, your Mom us unable to participate. The Living Trust may allow for these same types of gifts or even a loan to you and, in certain circumstances, a court order may be obtained.
Potential Problems: But, absent the procedures discussed above, the better questions are should you and what can go wrong? There are so many potential problems here it is difficult to think of or cover them all.
What You Will Owe Your Brother: If you spend too much of the money on home remodel or college tuition, there won’t be enough money left over to “even up” with your brother when the time comes. In other words he’ll be shorted. How do you pay him back what he is owed. I guess you could take a loan against your house to do so, but will you, will you qualify for the loan, will the interest rates be low enough that you can pay the loan back, etc? And since you obtained the money “early,” your Mom will not receive interest on the money (half of which would eventually go to your brother’s side of the inheritance), so you will really owe back to the estate after your Mom passes more than you received (the amount you received plus the interest never collected by your Mom).
What if you die before your Mom? Presumably, your kids would then inherit from the Living Trust when your Mom passes. Will they be as willing as you to pay your brother (their Uncle) what he is due? Seemingly, every generation further apart from your Mom, the less the “connection” and the less likely the money will be paid back.
What if your Mom’s needs and the cost associated with them skyrocket? And she sticks with us much longer than you had anticipated. Will the money start to dwindle? Will there be a need to pay out of your pocket for her care? Since the money you received has been spent, where will it come from?
What if your brother finds out and does not approve? Will he file a lawsuit against you to strip you of your right to take care of your Mom’s money, or worse?. Was taking the money worth it to destroy any relationship between you and your brother? Or can you involve him, come to some type of agreement, and at least get his consent?
Talk to an Attorney: Generally, I would say this is a bad idea if not done within a legal structure but if nothing else, talk to an attorney before you do anything. You can call us at 760-436-8332 to figure out the best approach.
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