I am the executrix of my mother's estate. While my parents were alive, they gave my sister $12,000 from the estate, with the understanding that I would receive $12,000 more from the estate than she, when everything was done.

There is approximately $143,800 cash in the estate. If I deduct $12,000 off the total, this leaves $71,900 for each of us, and with the additional $12,000, I would end up with $77,900, and my sister would end up with $65,900. This sounds logical, but the court will not allow me to take the $12,000 off the top, since it was owed to me a part of a trust.

My sister suggested that I send her half of the $143,800 ($71,900) and she will send me a check for $12,000. That way, I would end up with a total of $83,900 and she would end up with only $59,900 - a total of $24,000 less than me. If she sends me back $6,000, then it would work out to the above totals of $65,900 for her and $77,900 for me. How is it that only sending me back $6,000 works out to what seems to be the correct amount?

Your supposed to deduct the $12,000 BEFORE you split the money. Then it equals out. In splitting it then asking for cash back your asking for more then your share.

What initially seems counterintuitive (your sister only sending you 6K) makes sense when you view it this way...

Think of the 12K that she received earlier as actually belonging to the both of you---she just happened to be holding your 6K share as well as hers. Now, she sends you your half of the earlier 12K. With the earlier 12K now properly split 50/50, the remaining 143,800 can also be divided equally.

Just for grins, here's another way to see the equity of the arrangement: After you split the 143,800 and she sends you 6K...

... she has received 12K, received 71,900, and given up 6K.

... you have received 71,900 and received 6K. Same thing.

Quote:

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Originally Posted by ArcSine

What initially seems counterintuitive (your sister only sending you 6K) makes sense when you view it this way...

Think of the 12K that she received earlier as actually belonging to the both of you---she just happened to be holding your 6K share as well as hers. Now, she sends you your half of the earlier 12K. With the earlier 12K now properly split 50/50, the remaining 143,800 can also be divided equally.

Just for grins, here's another way to see the equity of the arrangement: After you split the 143,800 and she sends you 6K...

...she has received 12K, received 71,900, and given up 6K.

...you have received 71,900 and received 6K. Same thing.

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Thank you, ArcSine,

That's what I thought - it just wasn't quite making sense in my mind. Also, if my sister paid the estate back the $12,000 given to her, then we would still be splitting that now. You're right about the Court - hate it but have to follow their rules. This has been a tremendous learning experience.

I wouldn't ever sleep again if I let my sister pay me the $12,000. She's a little dumb but that would be cruel (and Mom would get me, I'm sure!)

Thanks again

My pleasure, kdill... (and yep, there'd be no way to short-change li'l Sis and have it escape Mom's attention ;) )

And I will throw a wrench into it, unless the 12,000 was in a loan, written, there is nothing that allows you to hold out this money if the other party objects

Roger that, and good point. Fortunately this is a case where both parties--kdill and Sis--are on the same page, both wanting to respect their parent's wishes as articulated in the first post (that at the end of the day everything's been allocated 50/50 as to both siblings).

I think kdill just wanted a confirmation that a 6K check from Sis--rather than the 12K amount as proposed by Sis--would indeed square things up (and so protect Sis from her own mathematical miscue).

But your point as to the mechanics of the settling-up process is a good one: Officially, do it by the book. Then later, you can square up amongst yourselves (if "by the book" doesn't precisely track the parties' true intentions, and if all parties are in agreement thereon).

Cheers, all...

Thanks again, ArcSine and Fr Chuck - the $12,000 was added to the Trust documents, so it's all well documented. Couldn't deduct it off the top of the funds in the estate because Probate Court would not understand. Couldn't get paid by the Trust because all that ended up in the Trust was stocks, which we didn't want to sell.

Anyway, I split the funds today, so she has her half - just have to wait for her to send me the $6,000 and we're square. She'll do it, because I know where she lives!