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Q

: My father passed away last November. About two years ago, I lost my job. My daughter was in a club sport and I couldn’t afford to continue for paying it, so my father volunteered to pay the monthly $600 fee. Before my mother passed away three years earlier, she asked that I take over the finances (paying bills and such) because she had always done it and she didn’t think my father could do it. My father had no issue with this arrangement and had full access to all his accounts and statements. Fast forward to today, and my sister and I are in the middle of selling the house and dividing up the money in his accounts. I received a letter from her with transactions going back to 2022 from our dad’s account to my account for my daughter’s monthly sports fee, and they totalled about $14,000. The letter said she will be subtracting this amount from my portion of the

inheritance

. My father didn’t ask that I repay him for the fees and he didn’t keep any written record that it was meant to be an advance on my inheritance. Can my sister do this? She threatened to take me to court if I don’t agree.

— Mallory

FP Answers

: Mallory, I understand you and your sister are in the process of dividing your father’s property. You did not explain if this was a sale through your

father’s will

or if you were both joint owners of your father’s house and accounts. This can make a difference for possible remedies to consider.

Unless both executors or joint owners agree to the distribution, everything may be on hold. I recommend you resolve the issue as soon as possible. Visit your own separate lawyer for advice. Your objective should be to resolve this issue without escalating matters.

First, consider that the amount involved is $14,000. Your sister alleges possible misconduct on your part. Seek legal advice to respond to your sister’s claim. Legal advice may assist you in ways that do not trigger more conflict. The time and expense involved should be proportionate to what is at stake.

Your own lawyer can confidentially discuss if there is evidence of a gift or loan for these funds. Mediation can allow you to discuss matters off the record to reach a private agreement and maintain your relationship with your sister.

Your sister may not be aware of the time and services you provided to your parents.

Here are some questions to consider:

  • Were you handling your family finances because your father was cognitively incapable?
  • Did you use his power of attorney? Instead, did you have your father’s consent to act as his agent?
  • Did you acknowledge the gifts from your father?
  • Are you entitled to compensation or a fee for managing the household finances?

On the other hand, if your father was cognitively impaired, your sister could allege that you unduly influenced him into making more of these payments, making you a possible fiduciary. This could require you to answer additional questions from your sister.

Do you have evidence to corroborate your position from other sources? This can be circumstantial, but supports your position. Your daughter may have been a minor at the time. She may be able to corroborate your story.

You should avoid escalating this matter into a court dispute. The costs of resolving matters in court may exceed the amount that is in question. To protect your reputation and relationship, consider mediation. Having an impartial third-party help resolve this matter may be your best alternative to court.

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Edward Olkovich is an Ontario lawyer at MrWills.com. He is certified by the Law Society of Ontario as a specialist in estates and trusts law. This information is no substitute for legal or tax advice.