Q: What happens if beneficiary of a $150,000 RRIF don’t want to pay the taxes due on a deceased relative tax account?
I am the Executor of a family members estate. Our uncle indicated in his will that all moneys, assets will be equally distributed to his 3 nieces. He also had three RRIF’s naming each niece a beneficiary to each RRIF. The uncle died with dementia before changing the beneficiary of the only remaining RRIF. What had happen was that he used up two of the three RRIF’s to draw a income over the years and at the end, there was only one RRIF remaining with only one beneficiary. The only RRIF that was left was a special RRIF because the interest rate was extremely high meaning that the amount every month that was being withdrawn from the uncle RRIF was not going down in value because the interest earned was greater than the amount taken out. After the uncle passed the RRIF amount was sent to the only listed beneficiary of that RRIF from that institution. Would the right thing to do for the niece is to pay the taxes owed and to distribute the remaining $100,000 between the other 2 nieces?
A: That may have been poor planning on your uncle’s part, but the niece who was the designated beneficiary has no legal obligation to share. The presumption is that is what your uncle intended. If she is inclined to voluntarily share, she should first consult with an attorney about possible tax consequences.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
