Q. My parents lived frugally and I never thought they had money. After they died, when I was cleaning out their house, I found a chest with nearly $250,000 in it, and another box with $60,000. Except for their house, that’s all they had. I have no idea where the money came from. Do I have to do something about it? How can I get it to a bank account without questions?
— Only child
A. We’re sorry for your loss.
It sounds like your parents really followed the old adage: live below your means.
It is generally unsafe to keep large amounts of cash due to potential theft or a disaster such as a fire, said Abby Rosen, a certified financial planner with RegentAtlantic in Morristown..
She said the first thing you’ll want to do is deposit the cash into a bank account in the name of the estate.
Next, she said you’ll want to review your parents’ wills. Did either mention the cash?
“You’re the only child, but I wouldn’t assume anything without fully understanding what your parents’ wishes were,” Rosen said. “This is why it’s so important to have a will.
If you are the sole beneficiary, it should be relatively straightforward, Rosen said, but you you shouldn’t make any distributions to yourself from the estate until any and all outstanding debts are settled.
If you are the executor, it is your fiduciary duty to make sure the estate is handled properly, Rosen said.
“Doing it this way shows that the money you receive came from your parents,” Rosen said. “If you deposit the cash directly into your own bank account, one, you potentially open yourself up to liability from any of your parents’ creditors, but you also run the risk of the IRS requesting the source of the funds, in which case you wouldn’t be able to prove.”
You may want to consult with an estate lawyer and accountant to determine any legal and tax consequences.
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