My Dad Is In Trouble With The IRS And Wants To Use My Inheritance

For reasons that are often very unfortunate, receiving an inheritance can be both welcome and worrisome news at the very same time. It’s an unfortunate truth that in many cases, receiving money from a deceased family member brings out the true colors in other family members. 

This is exactly what one Redditor is beginning to understand based on their post in r/legaladvice. With an unknown inheritance amount heading their way, the Redditor is concerned that their father is starting to indicate that he expects the money to be signed over to him as soon as it’s received. 

The Family Inheritance

Sadly, what should have been a happy moment for the Redditor who is receiving some cash that can help them out is turning into a potential nightmare. As it stands, the Redditor’s father is in trouble with the IRS after evading tax payments for many years and, unsurprisingly, got caught and now owes money. 

As a result, when the Redditor’s grandmother was writing her will, she told the original poster that she was leaving the money to him because if she had left it to his father, the IRS would have taken it. The way this was perceived was that she didn’t want the father to use the money, so it should go to the Redditor to use responsibly. One important point to note is that the Redditor’s father was present during the conversation and did not object. 

Now, after the grandmother sadly passed away, the Redditor learns they are receiving a portion of their grandmother’s IRA. Of course, the dad jumped on this and indicated that the original poster needed to liquidate this money and give it to him to pay off his wife’s expensive car. While we don’t know the exact dollar amount, the Redditor indicates it’s more than he makes in six months, so it’s likely in the tens of thousands. 

The Redditor firmly believes that they did not consent to giving this money to their father and doesn’t believe there is any reason to do so. The bigger concern is that receiving and then liquidating this money may disqualify the Redditor from some of the social services they receive, leaving them in a vulnerable position.

There Is Good News

As just about every comment on this post indicates, there is some good news for the Redditor. While they need to talk with a lawyer in person and show them the will, there shouldn’t be much the father can do at this point. 

Ultimately, the Redditor can formally disclaim the inheritance and give it all to their father. You aren’t legally obligated to take this money if you don’t feel as if you want it. Nobody is going to force them to do anything, and then the will can likely go into probate, and the father can fight it out in court to try and win the rights to the outstanding money.

On the other hand, you don’t want to be an accessory to tax fraud for your father, and you will be the only one left with a tax bill here. An inherited IRA must be liquidated within 10 years, but this is ample time to consult with both a financial advisor and a lawyer to determine the best course of action.

The bottom line is that the grandmother wanted this Redditor to have this money, and she left it to them. The best guess is that she knew the only way they would get any money out of this family was from whatever she left to them. It’s absolutely okay for them to choose themselves in this case, not what the father or any other family member expects them to do. 

The Family Stone

The bigger question here isn’t really about the legality of what’s being asked, but more about what the repercussions will be if the Redditor says no. Aside from the reality that the father will never speak to them again, will any other family members cast them out of their lives as well? 

Suppose the family is okay with this Redditor taking a tax hit, disqualifying them from financial services, and generally just making their financial life suffer. In that case, they should all take a hike. We don’t know how old this Redditor is or if they live on their own, but if they do, going no contact with family after receiving this money might end up being the best possible move they can make.

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