DEAR JEANNE & LEONARD: My brother is the executor of our father's estate. Dad died two years ago, and "David" distributed most of the $600,000 in the estate a few months later. But it has been 21 months since Dad's death, and David's still holding back $10,000, half of which is mine. He admits that all of Dad's bills have been paid, but says he needs to keep $10,000 in the estate for three years after Dad's final tax returns were filed in case the IRS decides to audit them. That means holding on to the money for another 18 months! By the way, it's not as if David believes there's a problem with the returns. He says he "just wants to be on the safe side." Isn't this unreasonable? If Dad's estate ends up owing the IRS something, of course I'll pay my share. But meanwhile, I could use my $5,000. Frankly, I think what's really going on is that my brother, with whom I'm not close, is enjoying making me wait.
-- Michael
DEAR MICHAEL: We don't know whether or not your brother enjoys making you wait. But either way, he's not being unreasonable in holding on to that money.
To begin with, the concern he raised is legitimate. There's always a chance that the IRS could decide to audit your father's tax returns or, for that matter, his estate's. If that happens, at minimum the estate will have to pay the accountant who prepared the returns for his or her assistance in responding to the audit. In addition, if the audit uncovers an error, the estate could owe the government not only back taxes, but interest and penalties as well.
Second, since there appears to be some tension between you and your brother, he may be worried that you'd be slow to pay your half of the expenses should an audit occur. Or he may simply be worried that, even if you wanted to, you might be unable to pay your share.
If it's any consolation to you, David is surely more eager than you are to close the books on your father's estate. Remember, this is work for him, work he's probably not being paid to do.
DEAR JEANNE & LEONARD: My husband and I have had a repair service together for 20 years. He does the repairs, and I do the office work, including bookkeeping. We have no employees. In the past few years, he's gotten it into his head that the money that comes in should be his alone because he's the one who makes the repairs our customers are paying for. Can he possibly be right?
-- J.C.
DEAR J.C.: We'd like to see him try telling that to a bookkeeper who wasn't family.
But to answer your question: No, your husband is not right that he alone is entitled to the income from the business. The time has come for you to present him with a bill for services rendered. And if he still refuses to come to his senses, strike!
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Family on 01/11/2017