My dad, who recently passed away, had me as sole POD or beneficiary on all his cds and bank accounts. His will says that his assets are to be divided equally among me and my 2 siblings. I know these are legally outside probate and the will but morally I need to divide these with my siblings. How do I do that other than cash them and gift them $18000 per year which only makes a small dent in them.
Answers
If you are executor or are able to obtain cooperation of the executor, and if the bank is located such that you are able to just walk in, sit down, and speak with a decision maker there:
What I would try is to go into the bank with the necessary letter of administration, show them a copy of your dad's will, and attempt to have the bank distribute the funds in accord both with your wishes and as ordered in the will. Worst that can happen is they refuse. But I think you might have chance for your desired outcome without first taking possession of all the funds personally.
I acknowledge if some lawyer is handling this matter, all that might be more difficult. When I was executor of my dad's estate, I handled everything myself, alone. There was no lawyer involvement.
You should have the option to turn down your POD inheritance. With that, and a document from you, the executor of the will should be able to go to all those places and claim it for his estate subject to the will. Or, maybe the procedure is then to go to probate court and someone seek to be administrator of that part of his estae, and then distribute it according to the same terms as in the will.
Only issue with doing it as Curious Dave says is that it woulld use up YOUR lifetime exemption for gifts. That means you would be able to will or gift less of your estate in your lifetime than you would have wanted to. But you might have to spend some lawyer money now in order to keep your full lifetime exemption.
My mother in laws wishes were to split the money between her 2 siblings. We gave my brother in law and his children gifts up to the irs limits. The money was split after all tax and other expenses (even ones we incurred).
I suggest contacting an attorney.
Probate can be a problem. I'm in a relatives will that has been I limbo since 2019. The problem is liquidating multiple time shares and some other issues.
the basis of the Investopedia makes Everyone a Speaker, but only in the Category of Reader.
10 years old with the Smartphone is a Reader nowadays!
12 years old with the Smartphone could a Investopedia Writer as far as I see it.
I see that Investopedia and similar anonymous sources are liberally using terms as Distribution, Honor, Trust and Will with no regard to actual meanings or explanations of real life implications.
I see that when Quotations without Interpretations are given as a response because of the prior Reading without Comprehension, some people could be set onto wrong and very expensive path.
Of Course an Informal Trust as POD or ITF, that is limited in in scope to Accounts/Deposits at given Financial Institution puts no Restriction or Obligation on Beneficiary. there is simply nothing in POD but the named Beneficiary, Nor Will, no Inheritance... nothing else.
However Will of Last Testament commonly contains the provisions regarding deceased person Trusts, Informal or Not, and often contains names different Beneficiaries for the entire Estate or Inherited Assets.
Those here who amazingly contest the Powers of Will would have to argue the definition of "Last".
I will not be amazed if such argument gets "Last" Wrong, because the true and undisputed LAST is the State Inheritance Law and State Probation Court.
There the powers go from Trust to Will to Law.
There are Category of "Heirs at law" and instances when Law overrides the Will and Trust is administered by Court order notwithstanding any POD or ITF Beneficiaries
IGR is not a specialist, definitely not as smart and not as real as MAGA.
IGR will not try to explain the mechanics to those who can not see the difference between legal Access and lawful Ownership, Probate and Will Execution.
@Kaight had given most comprehensive albeit incomplete response.
There is not enough information given and it imprudent to give pseudo-financial advise in such complicated mater as Trust and Inheritance.
In general, Asset distribution due to the death of the original owner is not the issue "Moral", is not the issue of "Gift" and is not the issue of "Tax" for person who executes Final Distribution... I am not saying some 1099 MISC or other IRS forms would not have to be filed.
Death is Complicated... evermore when mixed with Money.
It is very unfortunate that IGR stands to learn nothing out of this.
I don't believe POD, aka Trust, supersedes the Last Testament.
If Will lists the Accounts as an Asset to be divided. all POD makes out of you is the Executor of the Estate to the limit of the Assets under your name.
I don't think it is a gift, or moral issue. I think it is pure legal.
If all heirs agree and no layers are involved you can distribute as a "gift" to every member of your siblings households. If you do Cash, each of you legally obliged to report the transaction...
Go from here, depending on you goal. Just remember, POD or any informal Trust only protect funds from going under probation. Bank has no obligation to distribute Funds to you once Banks learns about the death of the original Signer. Most if not all Financial Institutions have Policy of Freezing the Accounts until all legal mater is cleared to FI satisfaction. No bank wants to be dragged into estate fight.
https://www.investopedia.com/terms/p/payableondeath.asp
Been there, done that.
would've been $1m in legal fees for a $50k claim and still be in the courts after 6 years with no end in sight.
I couldn't close an Account where I was Joint Owner, following the Death of the person named first on the Account! AND???
The Bank put the freeze on the account as soon as death certificate was issued to the SSN# associated with the Account! AND???
Should I give to Everyone testimonial advise to Empty out the Accounts after the Death but before Funeral?...
there was few dollars Account Balance, I cared less because I knew it'd cost m more in my time to deal with it and the Bank was out of state. Eventually I got annoyed receiving Bank Statements with on behalf of deceased person name as "pleased" monthly reminder.
I visited to bank and gave it two choices; close the account immediately, or wait for the account to become dormant and send funds to State Treasury administered Unclaimed Property Fund... the "fun" part of it, is that because the freeze on the Account the bank wouldn't even be able to collect inactivity fee!
Bank Manager overrode the freeze and closed the account.
I advise everyone not to accept Medical Treatments based on testimonial examples.