how to divide an investment account equitably

leaving57soonAugust 7, 2014

I recently found out that my and my sister's names are on an investment account started by my now deceased mother appx. 15-20 years ago. It was not set up as a 401-K, presumably because there are 2 names on it. My mother passed away 8 years ago. My sister never told me that my name was on the account, nor has she ever provided any statements relating to taxes paid or capital gains claimed. I feel that we should divide it up so that I can manage my own funds in a 401K. Since my sister helped my mother more than I did (I lived 2 hrs away), I was thinking that a 60:40 split would be equitable. Does this sound reasonable? I'm going to request paperwork for annual accounting to figure out the taxes/fees paid from the investment company, and consider deducting that amount from my share of the funds, provided that she actually paid them from her checking account If they were just deducted from the funds, then that will be considered, too.

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Sounds rather fair.

Depending on the amount of service that your sister provided to your mother - did she need quite a lot of care, late in life?

If sis paid the fees, taxes, etc., sharing that should be fair, perhaps including some interest, for payments made some time ago.

ole joyful

    Bookmark   August 7, 2014 at 7:15PM
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If your mother made a 50-50 gift, the account is 50-50. Whose social security number is on the account, your mother's, your sister's, your's, or some combination?

If your mother's, no tax has been paid on it since her death, so there's no "credit" to give anyone. How is it that your sister said nothing about it for 8 years or more? That's very odd.

If this is more than a trivial amount of money, I'd chat with a lawyer who does estate/trust work, a CPA, or both. It sounds like maybe you were in the process of being hoodwinked and someone got cold feet about it or found they couldn't carry on without your signature. Keep your eyes open.

    Bookmark   August 7, 2014 at 7:44PM
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Been through this, but my brother and I did a 50/50 split of my Mother's trust... and a 50/50 may be more equitable than the 60/40 you mention. Was your sister a live in care giver or just a drop in to make sure meds were taken, bills paid, there was food in the house, etc., etc.? Did your sister have financial POA and access to checking accounts - in other words did she use your Mother's own money to pay for your Mother's obligations?

If your name is on the account, the investment company should be able to supply you with information if your sister won't. Taxable interest and dividends, capital gains/losses would all be reflected on statements; maintenance fees charged by the investment company would be deducted from the account itself and not be taken out of anyone's pocket.

In our case, my brother managed our Mother's trust and did the buying and selling of assets, seeing to taxes, and doing all that kind of record keeping while I was the live in, primary caregiver for the 7 year descent into Alzheimer's. I did live rent/mortgage free and ultimately wanted the house at the appropriate time. All of my Mother's and house expenses were paid for out of her personal resources. Nothing came out of my pocket; and her resources weren't used as a personal piggy bank. We made sure there wasn't ever a hint of impropriety anywhere along the line. In dissolving the trust, we simply juggled the assets. My brother wasn't particularly interested in the house so we adjusted for the appraisal price. We worked it out to as close to 50/50 as humanly possible and it was all settled in about a half an hour with the lawyer.

Bottom line, you've got to be given access to information - and then you can go from there. Don't be too eager to give up what might rightfully be yours.

    Bookmark   August 7, 2014 at 7:47PM
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How do you know there's anything left in the account? Just sayin . . . . . . .

    Bookmark   August 17, 2014 at 8:29PM
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I'm not quite sure what the OP means by "manage my own funds in a 401k", but you're not going to be able to roll this into a 401k. It doesn't sound like these funds were in a retirement account, but even if they were, inherited retirement accounts can't be rolled into personal retirement accounts, except for those inherited from a spouse.

    Bookmark   August 18, 2014 at 9:10PM
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Yes that 401K reference threw me too, but the OP never chimed back in with additional info, so I figured I'd save my brain cells for now instead of trying to second guess. This may be like so many other posts I see where everyone but the OP seems interested in continuing the conversation.

    Bookmark   August 18, 2014 at 9:40PM
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Thanks for your input. Don't know what I was thinking when I stated 401K, because I knew it couldn't be placed into one (being retired). I visited the person managing the account. He is supposed to be sending me copies of the annual accouting, but hasn't done so yet. I can't set up an on-line account because I don't know my sister's SS#, which I'd need since she's the primary account holder. My sister lived in the same town as my mother, so she made arrangements for someone to stay with her during the day in her senior citizen's high rise. Sis did not pay out of her own pocket. My mother had some money and an inheritance of her own to live on. When living independently was no longer safe (mom had Alzheimer's) she made arrangements for her to enter an ECF Alzheimer's unit. She did stop by to check on mom, but did not live with her. The caregiver bought groceries and did chores.

    Bookmark   August 19, 2014 at 9:26AM
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How close are you to your sister (relationship-wise, not traveling distance)?

When you said 60-40, was that 60 for you, 40 for her? Or vice versa?

    Bookmark   August 20, 2014 at 7:07PM
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I was thinking the 60:40 split would be equitable with 40% for me and 60% for her, since she has less income. She is still working and I am retired. We both live in the same town now, and have been close, but since I've suggested dividing the account she has been emotionally distant. I took her to lunch to speak with her about the account. The only thing she said was "I was counting on the money to be a cushion." There is appx. $68,000 in the account, and the manager mentioned that there has been $44,000 withdrawn from the account since its' inception. My sister just bought a new SUV, so I've mixed feelings about this subject. I'm still waiting to get the paperwork from the manager.

    Bookmark   August 20, 2014 at 9:35PM
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Can you explain what you mean by the account is in both your names? Was this account part of the estate and fell to you and your sister as part of settling the estate? Or was the account set up for you and your sister and your mother funded it with a gift? Is it a trust account or a regular investment account?
If it was part of the estate, you should contact whoever settled the estate. The value of the account on the date of death is the value I would base the 60:40 split on. If your sister withdrew money since then, I would count it against her share.
And I would review the situation with a lawyer. If this is a joint account you may have under reported certain taxable items without knowing this was going on (such as having to liquidate assets to pull the cash amount out). And nothing speeds up a request for documentation like a letter from an attorney.
If you want to set this aside as backup funds for your sister, you could set your share up as a trust that provides income to you during your lifetime, then income to your sister in the event you die before she does, with the principal amount reverting to your heirs or estate when she dies. Sorry for the morbid tone of that last part. But you sound like you are close enough to your sister to not want to destroy the relationship over this.

    Bookmark   August 20, 2014 at 10:10PM
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Who settled your motherâÂÂs estate? If it was your sister she has not been truthful with you. As a beneficiary you were entitled to and whoever settled it should have given you copies of her will or trust and an accounting of all assets, how all liabilities were taken care of, and distributed any assets years ago.

Sorry to say but it sound like your sister was hiding this account to keep for herself. Who has paid the taxes on this account? Why is she the primary account holder? As far as her getting a bigger share because she took care of mom thatâÂÂs something that should have been stated in the will or trust if not and your mother left your both her estate equally a 50 50 split is called for. I know in my state the successor trustee who settled a trust can claim an additional 4 ý % of the total estate for the time and effort involved in settling the trust.

People do funny and often timeâÂÂs illegal things when they see a chance to especially if no one question them. Did you get anything of your mothers estate or did you just take your sister word for it that it was all used to take care of her? It sound like your sister is betting you will keep quiet to keep a relationship with her.

    Bookmark   August 27, 2014 at 9:36PM
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When you find out how much is left just divide it between the siblings regardless if they helped or not. I have 2 sisters that lives to far away to help mom when she needed it. I cared for her the first few year then my sis who lives here took it over. When the time came we divided it 4 ways. It is not fair to for us to get get more than the other two because they could not help. Even if they had lived here, life sometimes prevents them from doing their part. There are excepts to this of course, one being if any of the siblings stole from her.

    Bookmark   August 30, 2014 at 12:53PM
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