'She has a history of financial mismanagement': My brother cut our sister out of his will. I'll get everything. Do I tell her?

By Quentin Fottrell

'I'm torn between respecting my brother's wishes and being fair to my sister'

"I love my sister dearly. We have a good relationship, and the last thing I want is for money to damage it." (Photo subject is a model.)

Dear Quentin,

First, a little background. My dad passed away in 2023, leaving behind cash, collectibles and property. As his executor, I spent two years settling his estate, in addition to the two years before his passing working with him and his lawyers on estate planning. Even now, there are still a few loose ends to tie up. I received no compensation for serving as executor.

Once the major portions of the estate were settled, my older sister, older brother and I each received an equal six-figure inheritance. This would have made dad very happy. My brother and I invested our inheritances. My sister spent the majority of hers within 10 months, largely on "gifts from dad" for herself. And that's where things started to get complicated.

My older brother has since named me executor of his will and designated me as his sole beneficiary. He's always lived frugally, so I expect there will be an estate of some value. When I asked him why he had chosen to leave everything to me, he explained that our sister had always relied on dad to bail her out financially, right up until his passing.

She has a history of financial mismanagement and her wasteful spending influenced his decision. He also told me: "Plus, you had a full-time job and still gave up all that time on dad's affairs and got nothing for it. I just don't want to give her anything." I hope this is many, many years away - and, of course, there's always the possibility that I could pass before my brother.

Worrying about the future

But he's eight years older than I am and not in the best of health. If he passes before me, my sister will undoubtedly have questions. How do I handle that? Should I give her a portion of the inheritance, even though my brother explicitly chose not to leave her anything? If I do, would that be considered a gift rather than an inheritance, and what tax implications might that create?

Having been so transparent and forthcoming throughout dad's estate settlement, should I expect my sister to want the same level of disclosure this time? Do I tell her that my brother named me his sole beneficiary? And if so, do I explain his reasons? Or do I simply accept the inheritance as he intended, keep it and stand by his wishes?

Please understand that I love my sister dearly. We have a good relationship, and the last thing I want is for money to damage it. At the same time, deep down, I recognize that my brother has his reasons, and he has been very clear about what he wants. Legally, I understand where I stand. Practically, I know I'm worrying about something that may not happen for many years.

But emotionally, I'm torn between respecting my brother's wishes, being fair to my sister and preserving a relationship that means a great deal to me. How do I reconcile those competing feelings and, when the time comes, handle this in a way that respects my brother's wishes without unnecessarily damaging my relationship with my sister?

A Grateful Brother

Related: I'm 63 and spending $95,000 on a roof deck for my $500,000 home. Am I being extravagant?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

Your brother's decision to leave his estate to you is a private decision.

Dear Grateful,

This situation is only as tricky as you believe it to be.

First, as executor, you have the right to a reasonable amount of time to probate the estate, and the beneficiaries will have to wait until that process is complete. As you discovered, this can take a year or more, as state law provides creditors with a reasonable opportunity to make claims. Executors are typically paid between 2% and 5% of the value of an estate, so it was nice - but not necessary - that you did not take any payment for overseeing your father's estate.

Second, your brother is entitled to leave his estate as he wishes, and part of the reason for doing so is that he believes you are responsible with money. Of course, you are free to give your sister gifts after the fact, and that's up to you. However, you need to weigh the love you have for your sister and the pressure you foresee her putting on you with her wishes. That would be easier for some people than others.

Most people don't like ultimatums.

Your brother's decision is a private one. It's between you and him, and has nothing to do with your sister or your mailman. So, rather than see this as a choice between setting boundaries regarding your finances and respecting your brother's wishes - many people would not even consider it a choice - recognize that the two are not mutually exclusive. Whether or not you give money to your sister has no bearing on your esteem, respect or love for her.

Honestly, if your sister believes that your love for her is contingent on you handing over a portion of your brother's estate, what does that tell you about her character and your relationship? Assuming that to be true, it tells me that it is predicated on her wishes and - if she does not get her wish - that her love, communication and relationship with you is based on her getting her way. Most people, quite rightly, don't respond well to ultimatums and don't make decisions based on them.

Don't miss: Two months after my father's funeral, my stepmother asked me to repay his $40,000 wedding gift. Should I do what she says?

You face two choices

So what happens if your sister asks you about the money? You have two choices: Lie and say, "I have no idea," or simply say, "He left his estate to me." It's not your job or responsibility to explain your brother's reasons; you don't speak for him. Then, if your sister asks you to give her some of his money, you have two more choices: "Yes, OK" (she will likely do what she did before and spend it), or "No, I'm sorry. I want to respect our brother's wishes."

If you decide that you are not obliged to give your sister 50% - or less - of your brother's estate, that doesn't make you a bad person or a bad sister. If you do decide to give her 50%, knowing that she squandered most or all of her inheritance from your father, that's up to you. But you are essentially going against your brother's wishes, if you decide to do that. I'm not sure your sister will be satisfied with 30% if she knows more persuasion will get her to 50%.

Tell your brother about your dilemma.

I'm not going to tell you not to give your sister money, nor am I going to tell you to give her a share of your brother's estate. These are moral and emotional decisions that you have to negotiate for yourself. For what it's worth, I view your dilemma as one about having healthy boundaries - emotional and financial - rather than an ethical or moral issue. Whatever you decide to do, I believe you should do it in the open.

Assuming you can afford to live without your brother's inheritance, you could tell him now that you are not sure you will be able to abide by his wishes by not passing on a portion of his estate to your sister, if he were to predecease you. That allows him to make his decision with all the facts and either take his chances by leaving you his estate, leave you a smaller share of his estate, or simply go a different route and split his estate between friends and charities.

You owe both siblings the unvarnished truth.

Related: My 93-year-old father changed his will at the 11th hour, leaving my brother his entire $500,000 estate. Can I challenge it?

By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

More columns from Quentin Fottrell:

'Just watch Judge Judy': I'm in my 70s. Why do people keep making the same avoidable financial mistakes?

'It feels like he's quietly building a separate life': My husband inherited $500,000, but he refuses to spend it on our home

'We had the worst fight': I want my husband to retire at 65, but I don't want to lose his $280,000 salary. Is that unreasonable?

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-Quentin Fottrell

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