Finishing out my dad’s “estate” and looking for some answers and advice.

You evidently are able to do what you want without probate...just continue and communicate with those who "get" in a loving way. It does not sound like you are "greedy" and you have been given this responsability. Just continue to do it.

A banker advised us to keep a checking account with Dad's name for at least a year in case we received a check in his name or a bill needed to be paid.

I'm probably just repeating what others have said. But I have handled my parents' estate and that of an elderly friend. You should file for tax year 2020 on his individual return. Pay yourself off the top. If Dad specified an amount that's great, but otherwise it goes from (I think when I last checked) 4% of smaller estates to 1% of larger estate values per year of the estate pendency. Let a few months go by before you settle things because that will give Social Security, any retirement a chance to claw back any overpayments as well as any final bills to trickle in. We had a consulting doctor's bill come in MONTHS after my dad passed. But that was the only one that did that. Then when you split what remains, have an attorney and/or CPA look it over and give it the stamp of approval. (Definitely seek an attorney's advice over mine though. When money is involved, people get litigious, especially if they feel they are treated unfairly.)

Just wrapped up my brothers estate. Take your time. Do not rush into decisions. Keep track of your time and what you did as an executor. Be compensated for that work. Hire an attorney if you feel overwhelmed. I did. Best thing I did. Put aside some money from the estate for unexpected costs. Get professional advice, tax accountant, etc. Follow your heart regarding your brother.

Yes, you will need to file the decedant's income tax returns (Federal and State) for the final filing year. Imho, you should not distribute any funds at all until his estate is finalized. Perhaps you will require an elder law attorney and a CPA.
However, as dad "changed the deed on his house allowing me to sell without going though probate," does this mean that YOU now own the house? That may be a real sticking point.

Wait -- did your dad sign his house over to you to avoid probate?

If so, YOU are going to owe taxes on the capital gains from the sale on that house. You'll have inherited his cost basis rather than getting a new gost basis if you inherited it. That might not be much if he bought the house relatively recently, but if my folks had signed their house over to me, I'd be having to pay tax on the profit between their purchase price of $45,500 and the sale price of $1.8 million. (Yeah, it's California.)

I hope that isn't your situation, but if it is, you should consult a tax advisor. You do have to file taxes for your dad, and yours may have just gotten very complicated.

I would ask both siblings if they want a copy of key documents that specify terms of payment/s and to whom. If Dad said you were to be paid more and it's in writing offer a copy to both. If any mention of specific loans or gifts and amounts was detailed in your dad's documents offer it to siblings. When the house is finally sold, offer a copy of the transaction that puts the sales proceeds into the account - paper check, wire transfer etc. It will have the "pay to the order of" line that lists Mr. X, The Estate Of...you get the idea. The documents will show right down to the pennies. Your brother could see Dad's funds went into Dad's estate. Since these would be copies, you would only need to get to the post office and mail to each.
If it's not a lot of money in the bigger scheme of things, you and sister will probably get more peace and closure knowing all is taken care of to the best of your abilities. If it is clearly spelled out by your Dad and you and sister want to deduct monies owed from his amount, spell that out in a letter mailed along with his check amount. Keep a copy of the letter with your Dad's estate documents.

If your brother is in bad enough health to require group living, nursing home etc. in the future, you may be called upon again to deal with family financial issues. Limiting any negative encounters now may save you and sister more headaches and heartaches in the future. Your brother can't change so you decide if you should respond to any of his complaints or questions once you've got all monies distributed between the three of you.

I had a developmentally disabled brother who was always hurtful in what he said to all of us.    We always tried to include him in family celebrations (especially Christmas). He was very self-centered and we felt he was greedy.  He died this April and I was talking to his wife, she said he felt left out of things because he couldn't do the same as the rest of us, that's why he came across as greedy and needy.  My recommendation to you is to treat your relationship with him such that you won't look back later and think I should have done more.  I know it's really hard to do but you will feel better once your brother is gone. 

As for the disbursement,  We did an initial one about a year after Mom passed, but kept some aside to cover any taxes or unknown bills.  Then the rest was distributed.  No, you don't need to tell him what everyone else got, but you do need to let him know that  the money he owed your dad was paid back out of his share. (I know he probably wont like it and wont feel it's fair, but you can counter that your Dad specifically wanted it that way.)    Hope this helps you.

I would not distribute any funds until you have resolved every single thing in the estate, including the final IRS filing. Should something arise that costs more money, you already know you aren't going to get any help to pay it once you dole out what you 'think' the shares will be.

Dad's will says that executor gets more and you did all the work. Does it say how much you will get for your work? Also, is the amount sibling owed dad a substantial amount? You actually have both of these things documented in a will so if you intend to follow the will exactly, there is no reason all three of you would not get an exact copy of the distribution - using the very inventory you have dealt with. List all assets (cash, house, etc), money added to the assets by way of selling things - there's the total of estate. Then list executor amount along with any other debits to show cost of estate work and subtract from total estate. Everyone will easily see how much the distribution to each will be.

The only thing I would consider is the debt brother owed your dad. Could you consider extending the olive branch in regard to the debt? You already said he is not well mentally, etc. Why add any fuel to his personal fire? I wouldn't do it. If after all is said and done you/your sister no longer have a relationship with him, walk away knowing that you didn't add any more pain or anger to his already unhappy life. If Here's my thoughts on taking money out of his share:

Let's say everyone's share would be $10K each. He owes your dad $5K. So you deduct that amount from his share. He gets $5K and I would assume you and your sister would split what he owed dad - giving each of you $12,500 each. If you think about it, your brother didn't owe either of you any money. He owed dad. Did either of you suffer in any way by loans dad made to brother? Just record what his share would have been had you followed the will as option 1. Then do an option 2 dividing the estate equally to all three siblings and write a statement to explain that you/sister agreed to option 2 so that everyone got equal shares/loan forgiven. Walk away as peacemakers. That's what I would do.

Three kids can be raised together and come out totally different because of perception of how something in life touched them. It may be totally wrong, but at the time and age they were when it happened, each one can remember it differently. No one will ever really know where his pain, anger, and perception of things comes from - he could tell you and you would remember it entirely different. Let it go. Let him go, if you must, knowing that you were as fair (or more than fair) as you could possibly be.

You should get legal counsel, for many reasons. The attorney who prepared your father's will may be conflicted out if your brother challenges the will. Ask friends and colleagues for referrals for an attorney that they had a good experience with.

Since my sister had a stroke before both parents passed, I invited my niece to come to the probate office where the numbers were laid out. Everything was split right down the middle. I told my niece I had a full accounting of every dime spent on my parents and offered to show it to her but she trusted me BUT I still showed her the bottom line and bank balances and I split it all and wrote checks to my sister for her half. Niece came to closing of sale of my parents’ house and checks split by attorney. We had no problems. I was open and honest. I didn’t even take a percentage for being the personal representative which probate offered because my sister could not help what happened to her. Be transparent and nobody will question you and things will go smoothly.

yes, you do have to file a final tax return. That is Th e only thug I can answer for you.

My sister was executor of my grandmother's estate. Please wait to disburse funds until you have paid taxes for your dad, especially it your need to pay property taxes. After the house finances are settled and dad's taxes are paid, you can disburse the rest of the moneys. Keep all paperwork for 7 years in a separate file.

When my paternal grandparents dies, their will specified the amounts each son would get. My dad got nothing since he had outstanding "loans" to them, They choose to forgive the debts as his share of the inheritance. So yes, take out the amount your sibling owes as part of distribution, Your sibling will not appreciate it, but he needs to learn about consequences of his actions and the other siblings should not have to bear his burdens.

As for how much the executor gets, does the will stipulate an amount or is it open-ended? Consider how much actual time -maybe keep a log - is devoted to finalizing the estate and pay yourself accordingly.

I was executor of my mother’s estate and she lived out of town. I used an attorney and she was worth her fee. According to the laws of her state the executor receives a commission based on the total of the estate. The attorney (also CPA) handled filing my mothers tax return and the one for the estate. Money was held in escrow pending a proposed property tax adjustment. Check with your local state laws on the period for creditors to come forward to make a claim. In her case it was 7 months and disbursements were not made until that time passed. A final accounting of all assets, expenses and disbursements was given to those mentioned in her will. I have read probably the same book on boundaries because my brother decided he not only wanted everything, but should be executor to do so. My relationship with him now? He lives out of state and never bothered with his family, so that is fine with me now too.

Sorry for your loss. My mother died in November, and we are nowhere near where you are. My mother did put the house and the half of a 2-flat building she owned in a trust, so we can sell the house, but my parents were "savers." This means we have well-organized, carefully labelled file cabinets and bankers' boxes full of memorabilia and photos, books, slides, yearbooks, and some very weird housewares. You are very lucky that it only took weeks. We just got rid of the last nine boxes of my father's books two days ago. A few more boxes of stuff and we can start painting. Anyway, yes, you will have to do your father's taxes if he had any income in 2020. And there is a box on the form where you inform the IRS and whatever state you're from that he is deceased. As for your brother, he doesn't need to know how much anyone else is receiving. Unless your father filed a will with exact amounts detailed, and since you hadn't sold the house yet-that didn't happen, he has no way of finding out unless you tell him. So don't. If he gripes, you can point out your father's directive to deduct his debt. But for the sake of your sanity, you and your more responsible brother should not tell him what he's missing.

Hi...I am also winding down with my dad's estate and we are close to doing a major disbursement this month. My dad died in June. There is no specific waiting period. I did meet with my CPA to go over all the tax implications and I advise you to do the same. You will have to file a regular 1040 tax return for the time he was alive up to this death. Then after that you will file a 1041 for his estate. Have you gotten a EIN number for him from the IRS? If you haven’t then you will need that to file his estate tax form as they don’t use a SSN for it. So my best advice is to talk to a CPA.

Also, you want to be sure all his debts are paid and that you leave a little bit in his checking account in case some late debts come in or he owes taxes. Again which is why talking to a CPA would be helpful. We decided to leave quite a bit and do a smaller second disbursement later to be sure we had enough money.

You do not have to spell out all the different amounts people received but you do need to tell them what they are getting and in your brother's case what he owes is placed back into the amount to be split between the remaining heirs. They should each have a copy of the will or trust and that will tell them what their portion of inheritance is.

Bravo for you getting near the end. It is a lot of work and yes you should get more for being the one to take on this task. My sister and I have already put in over 60 hours and expect about 10-20 more.

To elaborate a bit more on the deed transfer and my comment:

""...changed the deed on his home allowing me to sell with without going through probate." This may result in having to claim the value of the transfer in your taxes. Granted it's being sold and proceeds are being used to honor his wishes, but it's a question I'd run by the attorney. Some states don't require it, but the feds may have a different opinion. It can be considered gifting and there are limits/year."

The situation we had was a little different. Mom's condo had been set up as a Life Estate Trust. It would have been better for us financially if she were able to stay there until she passed, but due to dementia, that wasn't possible (we tried bringing in aides 1hr/day to be increased if/when needed, but less than 2 months later she refused to let them in.) Rather than having it sit unoccupied (cost without add'l repairs would be about 10k or more per year just for RE tax and condo fees, never mind utils!), it was better to sell it. We could have rented it, but I had enough to do without becoming a landlord!!

Financially, we would have gotten a step up in value had we been able to wait for her to pass, which would reduce cap gains to a minimum. We still would have had to pay cap gains, but likely a lot less! So, because we sold it while she is still alive (just hit 97!), the bulk of the proceeds were distributed to us (remaindermen.) We put all the funds back into the main trust, for her benefit, to cover her MC and other costs, but we had to claim it and pay cap gains on our share. We distributed funds from the trust to cover the cost of the gains. As an aside, the timing was PERFECT! Sales were up and we actually had a mini-bidding war, with the price paid being more than what we asked for (of course having to use the EC atty to process, it sucked most of that extra down, but still, it was best!) Given that she's now 4.5+ years in MC, that's a lot of money that would have been lost.

Although it is different, by "giving" you the deed to the house, it is likely considered gifting and you may have to claim that on Fed and possibly state taxes. I use an Enrolled Agent (associated with and has to stay up to date on IRS rules!) to do mom's taxes (mine too, only for the cap gains issue.) If the atty doesn't have an answer, a competent tax person should be able to assist you.

Same with filing your dad's last return(s). Mom had the blockheads do it when dad passed - they made mistakes, no idea if those were ever dealt with, as I didn't have anything to do with it. In taking over doing her taxes the next year, I used that to help file hers for the first time - there were special forms, etc that I wouldn't have known about. So, it might be wise to get tax help too. The idiots who did hers didn't suggest changing her withholding, so she ended up with about $6k liability the year I did it. I had her change the W4 and adjust it, to get her as close to 0 owed as possible. Sadly, although I kept asking her if she got all the necessary tax paperwork for the next year, so I could work on it, she went back to them and they made a HUGE mistake (left off the pension.) Instead of breaking even, or close to it, she got a 5k refund. This resulted in having to refile (made them do it) and having to pay a penalty. Not too long after I took over her finances and had all her bills sent to me.

Anyway, I would ask the atty or better a GOOD tax expert about whether the "gifting" of the house will impact your taxes, and if so, can the cost of the cap gains be deducted from the assets before/during initial distribution of the funds, or later, from the amount you hold back, to cover any additional payments that need to be made.

Sorry for your loss.
It's great your dad was wise enough to do this. So many don't and make this whole process a nightmare!

I'd have at least one meeting with an atty, to cover your questions.

"...changed the deed on his home allowing me to sell with without going through probate." This may result in having to claim the value of the transfer in your taxes. Granted it's being sold and proceeds are being used to honor his wishes, but it's a question I'd run by the attorney. Some states don't require it, but the feds may have a different opinion. It can be considered gifting and there are limits/year.

I hear you on the sibling. I have severed ties with OB, but it has nothing to do with inheritance. YB will likely be ignored after mom passes. He isn't as bad but still is a PITA! IF either gives me grief when we get to where you are, they'll get both barrels! YB and I are POA and executors, but he does very little and complains about the one thing I ask of him (taking mom to an appt 4x/yr - I can't support her wt and she won't walk/stand w/out assistance.) I think about 95%+ of the work needed to get paperwork done, find a place for her, get the condo ready for sale, and managing EVERYTHING for her all this time (over 4.5 yr in MC and years prior to that) with the only help from them being a few trips to help with condo (took 1.75+ years of MY time and effort!), they better take what they get and shut up. NO contact with OB in over 2 yrs and only contact YB when appts are due. They say/ask nothing about what I do (all 3 are trustees, but I manage everything for her.) Time to ask is NOW!

"My other sibling and I have some decisions to make on what our relationships with him will look like going forward."
THIS should be separate from any dealing with the will/inheritance. I'd table it until the dust settles.

"So, I’ve heard varying figures on how long to wait before disbursing money when all is settled, six months?"
This is a question for the atty. Once all funds are distributed, if anything comes up, you might have to pay from what you get. Not likely brother will pay anything back and sister might be reluctant too. IF the atty can give you a time frame and $ amount, you'd be able to split the rest later per your dad's instructions. Def deduct the IOU from first pymt!

"Do I need to file my dad’s taxes next year?" Again, best to ask the atty, but my guess would be yes - final reckoning, since he have had income this year. Even if he doesn't owe taxes, it might be best to file, just to CYA!

"When I divide what’s left do I have to show siblings what each of us is getting or only what they individually are getting?"
My understanding is anyone who's a beneficiary is entitled to a copy of the will. It would show your dad's wishes. However, for specific $ amount each of you gets, including your executor fee, it is NO ONE ELSE'S business. I had to take over for an exec who passed before it was finalized (what a nightmare!) In the will, the $ amts were specific for some beneficiaries, w/ the remainder split between her sister and nephew. There's no way until it's finalized to know what the split amount would be, so... He can contest it. If he pulls that, the court might require reckoning, but cross that bridge if you come to it. If you give a copy to each, he WILL see that he'll be docked for what he owed. It would be hard to contest that, unless there are questions about the amt. If dad specified the dollar amount owed, go with that. Beyond that, none of you needs to know what the other is getting.

"Pretty sure that’s not going to go down well and not looking forward to him being able to compare our amounts." Again, don't provide $ amounts to him, so he can't "compare", but it's a reason to have an atty (paid by assets before splitting final proceeds.) If bro complains, have the atty deal w/ him, even if it takes funds from the final split. Less stress on you! When all is done, split the remainder and wipe the dust off your feet!!

Depends on what’s more important your brother or the money,

Thanks to all that have replied thus far. To clear some things up, I do not have to do probate, my dad set up the house deed and car title so that they didn’t have to run through probate to be sold, we saw his lawyer together last year to make sure all was in order, and she confirmed no probate would be required. His estate isn’t much, the only bills are current household utilities and medical bills

Just recently closed out MIL estate. She lived with us, sold her house as is before she passed. Because husband was her poa for financial and medical to avoid any issues of him accessing banking information or funds he was added to her accounts, apparently his younger sister was also on the account before he was added. When MIL passed, I told him to close checking and savings out and open an estate of account. Covered a couple of things, no auto credits or debits (ssi,small pension, supplemental insurance, etc.) We contacted every one the morning after she passed to close or freeze accounts, requested final bills on credit cards, informed physician offices. Almost all bills were already taken care of. Paid the one or two outstanding upon reciept of the final bill. Any expenses ie, cremation urns, obituary, ect. Came out of the estate money. He chose not to take a fee because there really wasn't a big estate (we were financially supporting her since his dad passed in 1992, our house, 2 children, her house taxes, insurance, upkeep etc.) We did not tell his 2 siblings what they were receiving but I am sure they compared totals. 2 weeks after MIL passed, out of state baby sister is screaming over the phone that how could he close mom's accounts, her name was on those accounts and he should've asked her permission, did he know how embarrassing it was when she wanted to make a withdrawal and couldn't, she was attempting to get most of the money from the accounts before anyone realized what was happening and there would not be a darn thing anyone would've been able to do about it. MIL did not need to file taxes, even for interest on CD from house sale. Still waited 8 months to make sure everything was accounted for. No need to file probate in our state because of the way her accounts were structured. I made sure to keep everything in a file for DH, accounts closed, exact amount opening balance in estate account, kept all receipts for expenses, whom I spoke to, date, time same for husband. Document, save everything just in case, follow dad's wishes. If toxic brother has issues you have what you need. I would not share exact amounts with him, sorry I will not discuss others financial transactions with you just as I will not discuss yours with others. Don't know if dad had enough of an estate to require probate or how he structured things. Our estate is in trust for our children and grandchildren so probate is avoided. We did pay a reputable estate lawyer to set up trusts and will. (Also poas, end of life choices, etc.)

See an attorney to assist with close out. Most places say one year.

i thought most places, the executor had to provide all information that you are suggesting with the probate court.  that is public information and your brother can access it.  Whether you chose to is up to you, but in all likelihood you will get nothing but grief from deadbeat brother

I just read what Alva said. For me Moms estate was not large. She was in LTC with Medicaid and SS paying for her care. Moms income was 1700 a month, 200 of that a pension, the balance SS. Her bank account was comprised of a few hundred dollars and the house sold for 40k. There were no taxes owed because her estate was not that large. You are allowed a certain amount before taxes need to be paid. Even your inheritance may not be taxed. It all depends on the amount received. We have inherited up to 40/50k and not paid taxes. I checked with my tax preparer and she said because of Moms income, I did not have to file.

I would not share how much each is getting. No need to create a fight.

I would be sure that you show dad's wishes to each in writing and make it clear that you are not responsible for the choices, just carrying out orders.

I never recommend having a relationship with anyone that is a trouble hunter. The consequences are never worth it and you are not responsible for his life. I love my brother from afar, because he tries to destroy my peace of mind and wellbeing and I refuse to deal with his hate and drama. It only gets worse if he feels like he is in control of the contact. Protect yourself from him and do whatever you need to do to keep your peace and wellbeing.

I did everything you did. Moms house was left to my Brother but it sitting for 5 years caused a Medicaid and tax leans so I had to hire a lawyer to transfer the house back to the estate because brother didn't want the debt. Best thing I did. The lawyer then took over Probate for me. The house sold shortly after. He handled that. The proceeds went into an estate account. As did Moms bank account where I had been putting her dividend checks and tax reimbursements. The Lawyer did the accounting. I was reimbursed for any out of pocket I had incurred. Once my brothers reviewed the accounting and signed off on it, they received a check for their portion of the estate. The house sold in June, we had a money within a month. But no one contested the accting. If they had, it may have taken months to settle.

Executors are entitled to a % whether written in the will or not. Here in NJ I think its 4% up to a certain amount. As the estate gets bigger, the Executor gets less. Make sure u take it otherwise it goes into the estate and gets split. If in Dads Will it says that the loan gets deducted from brothers share, then it gets deducted. If it doesn't, then not sure if u can deduct the amount. This is why hiring a lawyer may be a smart thing to do. You have done all the hard work so the cost of doing an accting and closing probate shouldn't be much. And having a sibling like you do, it may be in your best interest. He may not contest with a lawyer involved. Then you know everything is on the up and up. If brother contests the Will, then you can say the accounting was done by a lawyer. But by contesting he will need a lawyer and that is an expense he may not want. I found everything went so much easier with a lawyer. And I didn't have to do the final paperwork.

Taxes...this I didn't have to do because Mom hadn't paid taxes in years because basically she only got SS and a very small pension. SS is not taxable if your income stays under a certain amount. So, doing Dads taxes will depend on any outside income other than SS he gets. That is a question for his tax preparer.

Relationship with Bad brother may never be a good one. Sounds to me he may be self-centered, maybe a Narcissist or have some kind of personality disorder. If so, you will never be able to have a relationship with him. People like this never think they are wrong. So better when everything is said and done, back away from him. Do not allow him to intimidate, bully or abuse you in any way. Don't answer calls from him, block him. Don't answer the door. Have no contact. If you allow his abuse it will only cause health problems. Don't be there for him in any way. He will only use you and it will be hard to escape.

You must see a lawyer, that advice coming from a person doing EXACTLY what you are doing now, but without the sibling torment. You are being paid because you will have to do this. This money comes out of your Dad's estate (for CPA, Lawyer, and whatever else you need).
Answering questions about this all is something even the CPA and Lawyer and BANKER won't do. They keep saying, "ask the banker" and "ask the lawyer" and "ask the cpa".
A Trust isn't filed, so you need not disclose (I am told) as to who gets what. A will is filed for probate, or just filed, and it is a public document. However there are letters, as executor, that you have to file to EACH beneficiary, notifying them that they are a beneficiary.
How long it takes to settle an estate depends on how large it is and how much is involved. You DO NEED AN EIN number. Because yes, you are responsible for filing taxes in the coming year. You may be ("ASK THE CPA" comes in here) filing two tax forms, one your father's taxes for the portion of the year he lived, and one the taxes on the "estate" after he passes.
So get thee to a CPA, a Lawyer, and find out what letters and notifications you must file. It is not on you to EXPLAIN anything to your brother. Simply tell him that you "assume" you get a bit more due to all the work, lawyer visits, real estate sales, and etc you have to do, but you don't really KNOW, and Dad isn't here to ask. After that statement, other than the letter you send him as a beneficiary, there is nothing to say but "I don't really know. Sorry."
This will get done. Keeping one account for not a lot, open for the coming year isn't a problem (I am told here in California) and won't create a new tax year. The will will stipulate legally when you can begin to disperse money. You will want to be certain that there are not more bills come. That is the questions for your LAWYER, hee hee. Once more bills show up and the money is all dispersed it must be got back from beneficiaries to pay bills, something you do not want.
Long story short (I always go WAY too long, anyone can tell you) is that this isn't for amateurs and in an estate of any size at all you do need the advice of a trust and estate lawyer, and of a CPA. Make certain this lawyer works on dispersing an estate. Some only work on writing wills and Trusts for the living.
I only needed one and one half hours of a lawyer. Best time I ever spent money on. (or my poor brother did).
Good luck. Not easy and not fun. Especially when there are any family members who want to cause any trouble.