How to 'store' money for estranged sibling

[AnalLysis]

Hi all, apologies, this is long but I want to be clear.

My DSis and I are due to inherit some money from my late mum's estate. I am being confirmed as executor (Scotland) with the assistance of a lawyer given the size of the estate. There was no will and therefore it's a straightforward split between siblings. However - we have another, older sibling who has been estranged from our mother since her first marriage ended in the 1970s and a stepmother came onto the scene. We have never met this woman, and are both in agreement that this would possibly turn her world upside down and be very distressing, particularly as we don't know the full circumstances surrounding the divorce, custody battle etc. However, ultimately this money is hers. With advice from the solicitor, we have decided that for now, we are going to put a pin in it. Essentially the plan is to be paid half each, then each put a third into a joint savings account for our sibling. The solicitor has advised we both need to sign an indemnity stating our understanding that this chunk belongs to her. We can then take some breathing space to decide how and when to contact her (assuming we can track her down). However this means that we are both going to end up with more than we are due initially, which is an issue for my DSis as she is currently on Universal Credit. She is working full time, but it is looking increasingly likely that she may have to stop working for a period of time to look after her DD who has a degenerative condition and is a year away from being old enough for adult residential care.

We asked whether I as executor could be paid two thirds of the estate (therefore have sole responsibility for looking after sibling's share), but apparently this is not possible unless I've misunderstood.

My question is, given all this, what is the best way to store the money for my estranged sibling without this impacting my sister's day to day life? Obviously her own inheritance will impact UC and this is clearly fine, we've no interest in rinsing the benefit system. It's more that we don't want her income to be impacted by 'holding on' to someone else's money. Would the indemnity be enough to show that this money isn't actually hers?

Thanks for any advice.

With love and respect to you OP, you don't get to decide for her (your estranged sister) that it's better to delay telling her (that her mother died and left her money). You're not in charge of her emotions, and it sounds as if you don't know her, so you don't have a clue if she'll find it easy breezy, deeply traumatic or anything in between.

Nor do you get to withold money from her in these circumstances.

You don't hold on to any of it OP.

You get your third, likewise your sister, the other third is put in an account by the solicitor who then proceeds to find the missing beneficiary.

I think what you by “put a pin in it” is “see if we can get away with it”

My thoughts too. Dragging it out.

As PP have said, this put a pin in it plan sounds very iffy. Surely the estate can pay you and your sister your actual entitlement, and leave the other in an executor bank account until the older sibling had been contacted. I can see why it would be awkward, but you could always pay for a specialist heir hunter style company out of the estate? Obviously would lower the entitlement but the other plan sounds incredibly flawed.

My dad was still legally married to my mum at the time of her death (had been separated many years) and he signed a waiver to say he didn't want his entitlement. (My mum was in Scotland). His share then went back into the movable estate.

This is what I thought.

i don’t understand why the solicitor suggested op ‘looks after’ it.

Surely the money stays in an executor account until it's paid to the rightful person. So isn't personal money of either of you for benefits purposes.
And shouldn't the cost of finding the sibling come out of the estate before distribution?

No solicitor would suggest this. Op is adding complexity to drag it out.

So this woman’s mother has died and you are going to defer telling her this? Because why exactly, how is it going to be less devastating later?

Just crack on OP, get a specialist investigator and get her found. And certainly don’t take the money that is earmarked for her. Even temporarily.

@WasabiWinner good point . Yes agree she should outsource it and just take her share

You hire someone to find her and you give her her money it's not yours to hang onto until you feel like dealing with it!

Find her, she gets official communication that she has an inheritance, she gets her money. If she wants to dig into its origins, that's on her.

If your mother has died intestate and has three biological children then her estate after creditors claims must be divided equally between the three children. Any lawyer suggesting you ignore this little inconvenient third child in the immediate term is making things very difficult for you as executor, as your hold liability over the estate distribution. You could possibly look into putting the third child’s inheritance into trust until she or living relatives can be found allowing you to settle the estate quicker.

This is the job of the solicitor not you. Why are you both looking for drama?
If you want contact with her find the info. But the money doesn't touch you. Ever in any way.

I'd say hire a private investigator to track her down. Money from the estate can pay the fees. We had to do this recently for other reasons and it was a fixed fee to obtain a current address for the person.

Don't muck about with extra accounts, just ask the solicitor to keep the funds safe while she's being looked for. You can still take the money for you and your sister when you're ready.

This!

There was no will and therefore it's a straightforward split between siblings. However - we have another, older sibling who has been estranged from our mother since her first marriage ended in the 1970s and a stepmother came onto the scene.

There is no reason why this money even goes anywhere near you or your sister who is not estranged.

The estranged sister must be found.

With advice from the solicitor, we have decided that for now, we are going to put a pin in it.
I would check his credentials!

erm, just checking, this isnt a reverse where you've found out someone close has died and you havent been looked for for your inheritance?

OP, you need to open an executor account once probate has been granted, then pay all the estate into that account. From that point, you can give yourself and your sibling your thirds, and leave the remaining third there until such time as you contact your half sister.
Please remember, if your half sister has died, her share will go to her beneficiaries, who may not be yourselves.

Your solicitor has misunderstood Scottish law and I suggest you get another opinion. Under legal rights, if there is no spouse, no will and assuming one other sibling plus you, your sister is entitled to one third of half of the total moveable estate, ie one sixth. This cannot be withheld from her, or given to you and your sister to 'hold' for her, your solicitor has to make reasonable efforts to track her down and award the money. You're acting illegally to hold this money in a personal trust, no matter what undertakings you sign.

erm, just checking, this isnt a reverse where you've found out someone close has died and you havent been looked for for your inheritance?

It might be worth pointing out, reverse or not, that the woman can make a claim against the estate for up to 20 years.

The final third of money should never pass to you and your sister as you are not legally entitled to it.

There are heir hunting firms out there which could be paid to look for a missing sibling. This money probably could come out of the estate itself.

With regards as to turning world's upside down - there is a legal responsibility here to execute the will. Ultimately it's not your choice to forget about the sister for this reason - it's been taken out of your hands.

You can not just take the money and hold it - precisely for the reasons you give. You could take out loans against money that's not yours or not get money that you are entitled to in the reverse. It's not an option because legally it's not your money.

The solicitor splits the money three ways. Sibling A and Sibling B get their money immediately. A third. Solicitor then goes about trying to contact Sibling C. Solicitor keeps Sibling C's money in their account - the solicitor's account - while the tracing takes place. This is not a difficult task for the heir hunting type firms.

When Sibling C is traced, the solicitor transfers the money to her/him. The other two have no say in this. All the stuff about A & B getting 50% each then indemnities and nonsense about them setting up a third account - just no. Leave it to the solicitor.

My father found out he was adopted when his second parent died and there was an argument over the (actually very clear) will. It threw a rock at him from left of field but we handled it. And moved on.

The facts of the case are not yours to worry about. She has been left money in a will by someone and that's all that matters. It's the executors job to keep that money safe (not in your own personal names), trace her and make payment.

This.

It is really not your place to imagine she wouldn't want the money now. You have no idea what she wants and it is none of her business.

OP, I think people here are being very unfair to you. In terms of when you tell your sister, dont delay, it will just cause problems. If your solicitor will not take this third of the estate and hold it while the daughter is traced, then find a specialist company who will. It is must better and cleaner that this money never comes near your personal accounts.

It’s a shame this sister wasn’t involved before her inheritance was available.