My sister passed and I am tasked to distribute her savings to her two adult siblings. The funds are in my name - I took them over when her dementia got worse. The daughter has a gambling problem - I gave her $5000 and she spent it all in less than a week despite rent, utilities, etc., coming up. She's 46, never had a job in her life, and completely irresponsible.

I am sure my sister's wishes were to give the kids the money but I morally cannot just let the daughter crash and burn. Yes, legally the money is hers.

Is there some sort of 'trust' that could dole out the money? I don't want to micro-manage her world but I cannot ethically let her lose it all overnight.

Suggestions appreciated.

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I agree, if the money is NOT yours, seek legal advice. If there is enough $ going to her, then a trust with a small monthly payout is what I would consider. I sympathize with you, my husband is the executor of his mother’s estate and there is one sibling that is financially irresponsible and always has been. My MIL had a savings account with a substantial amount of money that was set aside for her grandchildren to help pay their college tuition later on in life, it was to be split amongst them evenly. On her deathbed she decided to not to split the money amongst the grandchildren, she told my husband to split it amongst himself & his siblings. He asked if he could put the irresponsible siblings share in a trust or a money market account or anything that couldn’t be touched right away, that way our nephew would have the money when he needed it and she said no. The money was disbursed in August and that siblings share is long gone, he went out and spent it in an entire weekend! It was his money though is what it is.
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Reply to worriedinCali

Have all the taxes been paid by the estate?

You want to get that dealt with so you are not out the taxes because you gave the money away according to her wishes.

If it was put in your name, you need to ensure this is taken care of.

Seek legal advise from an Estate Attorney, this will save you the added expense of a CPA.
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Reply to Isthisrealyreal

commander There are many types of trust. Research on line. There does need to be a trustee. You can possibly be the trustee.
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Reply to wuvsicecream

I would do what others told you about talking to a lawyer and see if the money is yours or hers legally.
If the money is yours & there is not enough money to set up a trust, you can put the money into a Money Market Acct with her name on it. There are MM accts that a person can only withdraw the money out 2 to 3 times a year and only a given amount, plus MM acct has better interest rates, she would get a small dividends every quarter, or you can have the dividends rolled back into the acct. Another idea is to put the money in a CD acct which the interest rate is not that good, she would also get a dividend every quarter, but the dividends can be rolled back into the CD as well. She can't touch it for 1,3, 5, years however you set it up for. Both these accts are cheap and easy to set up at a local bank or credit union. And there is your poof that you did not take or use the money for yourself. Just an idea.
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Reply to Shell38314
Takincare Nov 17, 2018
Problem with a money market account is that they limit withdrawals between 3 to 6 WITHOUT a fee, after that the bank will charge a fee per excess withdrawal. Also there is normally a minimum balance that needs to be maintained in the account to avoid a service fee, and this account will give her checks to use at her own discretion.
Amen to posts from Marcia7321 and 97yroldmom! You can only try to protect some people from themselves, but you need legal advice to do it properly to protect yourself in case you need a clear trail for your future needs. Good luck...🍀
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Reply to tazlady

IMHO you need professionals well versed in this issue. Perhaps an attorney and a CPA? Since the money is in your name, you need a clear paper trail that the money isn’t yours and what you do with it so you and sister’s heirs are covered properly for the IRS and Medicaid should it be in your future.
I can appreciate your wanting to protect your niece from her addiction and the law may be on your side IF you handle things properly. The thing about taking action that might make perfect “moral” sense is that it doesn’t always protect you from legal ramifications.
unless your sister left enough to make a significant difference in her daughters future then you may just be going through an exercise. And what about the other siblings funds?
I know this is a tough spot you have found yourself in. Come back and let us know how you work it out. We learn from one another.
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Reply to 97yroldmom

You may want to just check with a lawyer. If your sister put all the money into your name then, legally, that money now belongs to you. Maybe morally it belongs to your niece(s) or niece/nephew but not legally.

If the money is legally hers, I don't know how you can keep it without her permission. However, if it is legally yours and you are giving it to her because that's the right thing to do, you will have more options. There are trusts that can be used called spendthrift trusts. Or, if there isn't enough money to justify the expense of setting up a trust, you can offer to pay her rent until her portion of the money runs out. At least then she'd have a place to live.

A consultation with a lawyer would be your best move here.
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Reply to Marcia7321

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