The Moneyologist: My siblings bounced checks on my mom, so I kept $20,000 after she died


Source: Market Watch Personal Finance

Dear Moneyologist,

My mom died 2014. I had her power of attorney for many years and stopped a foreclosure after my siblings stole her money, resulting in her checks bouncing. I worked with all her creditors and medical providers to keep her as comfortable as possible from 2008 to 2014. I have a large folder of paperwork to prove this.

One year after she died, I got notice that she was eligible for a class-action settlement from her mortgage company. I received the payment and did not share it with my siblings. They have found out and have threatened to sue me. There are five of us, and the settlement was for $20,000. I was married at the time, and my ex-spouse benefited from the money as well.

Do my siblings have a case? Would my ex-spouse be a co-defendant? Thank you.


Dear Kelly,

If you received the money and spent it, then you are the one responsible for it.

It would be difficult to prove without a paper trail that the money your husband may or may not have spent is part of that $20,000. Power of attorney gave you certain rights when your mother was alive, giving your access to your mother’s bank accounts. I understand that when we mix families and finance, the results can be less than ideal but — whether or not you feel that your siblings stole thousands of dollars that should have been returned — they should have received their fair share of this class-action windfall.

Pursuing this in court would be counterproductive for such a relatively small sum, given the lawyer’s fees. Suggest splitting the money, and sign an agreement that you won’t take the matter further after that. Then, you will have do decide what you should do, if anything, about the money you say your siblings stole from your mother. You don’t say how much they allegedly stole from your mother. If it was a similar amount, however, it would make sense to not to take legal action.

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“If you had a written contract in which you were to take care of your mother in exchange for her paying you and there is money owed to you, then you may be able to defend the case by claiming the $20,000 was just for debts owed to you,” says Blake Harris, an attorney at Mile High Estate Planning in Denver. “However, without a written care contract, you will probably lose the case and get stuck paying back the majority of the $20,000 as well as the court cost and legal fees.”

The Moneyologist Facebook Group raises another issue for you. It may be far easier to prove that you took money that should have been distributed through your late mother’s estate (a.) if this $20,000 arrived while her estate was going through probate and (b.) if your siblings were beneficiaries of the estate. Legally, you could be in a far more vulnerable position, especially if (but not only if) you were the executor of your mother’s will.

There are no winners. It appears that all the siblings here, in one way or another, helped themselves to money that didn’t belong to them.

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Hello there, MarketWatchers. Check out the Moneyologist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas: inheritance, wills, divorce, tipping, gifting. I often talk to lawyers, accountants, financial advisers and other experts, in addition to offering my own thoughts. I receive more letters than I could ever answer, so I’ll be bringing all of that guidance — including some you might not see in these columns — to this group. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyologist columns.

Source: Market Watch Personal Finance