Q&A: Inheritance dilemma

Question: My mother is age 90 and lives in a nursing home in Nova Scotia. She has Alzheimer’s so my youngest sister has power of attorney and looks after her affairs including her finances. The cost of my mother’s care has been calculated based on her current income which includes Old Age Security, Canada pension, and a portion of my father’s pension thus her bills for her retirement home are covered.

My question. Can my mother’s estate be paid out to her children while she is alive since her financial requirements are being taken care of and she has no need of the money? All four children are in their late 50s and early 60s. We all love our mother dearly and happily, or sadly because of her condition, she might live for another 10 or more years and by the time any of us receive our inheritance we will be too old to enjoy it. My mother’s estate includes cash of $85,000 plus the cash from the sale of her home of $182,000 for a total of $267,000. Me and my 3 siblings are to share in my parent’s estate as laid out in my father’s will. What would you advise? – B.M., British Columbia

Gordon Pape answers: I would advise you to consult a lawyer. If your mother were sentient, there would not be an issue because there is no law against giving cash gifts to adult children and no tax implications in doing so. But in this case she is not capable of making that decision and your sister, one of the beneficiaries, holds power of attorney. There would clearly be a conflict of interest if she were to use that authority to pay out the cash in the estate to herself and the rest of you. The laws covering this kind of situation are complex and vary from province to province so you need the guidance of a good estate lawyer.

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