# Can large gifts be put in small portions to alcoholic instead of giving all at once?



## Boris (Aug 25, 2015)

My mother prior to a stroke offered to gift to my brother a large amount of cash. I am her POA. 

My brother has been an absolute alcoholic for at least the last 10 years and cannot be trusted with such a large amount of money outright. 

I have given him portions of his gift in small amounts but he squanders it all away very quickly. 

I am wondering if this may be seen as structuring or something that can bring problems to me or would the receipt of gift affidavit protect me from any problems with cra?


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## marina628 (Dec 14, 2010)

I cannot advise you on legality etc but could you share the age of your brother now and where is he living?I too had a brother with a drinking issue but he was smart enough to set himself up with a budget but unfortunately he died from cancer at 53 and left a pile of money for somebody else to enjoy.I think the issue you may have is if he challenges you for HIS money ,not much you can do then I suppose.Your mother is still alive though and who knows what money she will need ,I would assume protecting her is most important over keeping a verbal promise to give you guys the cash unless something formal has been in place..


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## Robillard (Apr 11, 2009)

Do you think you and your brother can agree to use the funds to purchase an annuity that has a present value equal to his share of the gift from a life insurance company? If so, that might provide a basis him to get his share in small doses.


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## Boris (Aug 25, 2015)

I am only concerned with problems with cra coming to me or him and saying I am structuring or money laundering or some other "suspicious" bs line they or some banker wants to threaten me with over the next year or two if I keep sending him 5-10k per month total.

Thanks Robillard I will research what an annuity is


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## sags (May 15, 2010)

If the original intent was to gift you 50% of the gift in cash and have the other 50% administered by you to your brother, it should have stated so in a legally binding agreement.

In view that your brother has not viewed such an agreement, and has not legally agreed to you administering his portion of the gift, you could be in serious violation of breach of fiduciary duties as the power of attorney.

One consideration for the courts would be the return on capital that your brother would be entitled to if he had the full amount.

Gifts would also effect a future estate value, and future heirs or debtors (including the CRA) may want a full accounting of how your mother's money was spent.

The duties and powers of the power of attorney normally are restricted to only normal day to day living expenses protecting the capital.

I worked with a guy who had power of attorney for his mother's accounts, and a dispute and phone call from a sibling to the police led to criminal charges and a conviction.

I would also question that if you are the power of attorney for your mother, how she could legally consent to the gift at a later date.

I think you should seek legal advice immediately.


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## AltaRed (Jun 8, 2009)

sags said:


> I think you should seek legal advice immediately.


I agree. 

It seems based on how I read it... Only 50% of the proceeds of the house sale were to be split between OP and his bro, not the entire proceeds. 

It is not clear there was any documentation for this. If there was, IMO, the half of the proceeds should have already been disbursed from the mother's assets and divided between the OP and bro....in which case, the OP is in violation of fudiciary duties. If there was no documentation of any kind, then it is just heresay and none of the funds should be used by the OP nor the bro in any form. Those funds should be retained in the name of the mother for her care while alive.... in which case, the OP is again in violation of fudiciary duties.


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## Boris (Aug 25, 2015)

I am not trying to keep his gift from him, I am only trying to find out if I can have CRA problems for portioning it to him

If I may ask, the phone call from the sibiling in your example was no doubt due to the POA stealing money for themselves, something a POA cannot do unless they have an affidavit of gift. Correct? Otherwise please give the details how the police could come and charge him with anything and have him convicted of anything. In our case we are the only 2 heirs as well so no outside party could challenge the gifts.


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## OptsyEagle (Nov 29, 2009)

To answer your question, you or your mother can give him one big gift or a thousand little gifts over a year or the course of many decades and all those gifts are tax free. The only issue is if the money you are giving him or your mother is giving him has generated a unrealized capital gain. If it has a gift would be a disposition and the tax on that gain would be paid by the one who owned if before the gift. It would only be the tax on the gain, not the amount of the gift itself.

I hope that answers your question and yes, an annuity might simply allow you to make one big gift and have money paid out to your brother over his entire lifetime by the insurance company, and you would not need to deal with it again. Definitely something to look into.


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## Boris (Aug 25, 2015)

"if the money you are giving him or your mother is giving him has generated a unrealized capital gain."

This is another thing that I wondered how cra would view it. I paid the bank interest on the full amount of both my brother's and my gift on my own personal income tax, since I have not physically transferred all the money to his bank account. My response to cra if questioned would be that I was holding the gift in trust for my brother and paying the tax owed for both of us as if it was separated and in different bank accounts, which it is not at this present time of course but I thought the better idea would be for me to pay all the taxes rather then 50% of it which would imply that my mother had not gifted the entire amount.

"you or your mother can give him one big gift or a thousand little gifts over a year or the course of many decades"

Since it is my mother's funds being gifted to my brother, would she have to sign an affidavit for each and every one of possibly 100s of gifts if they are not done all at one time, or is the one affidavit for the total amount sufficient, and then me just keeping records of each wire transfer into his account from my mother's and my joint bank account? 

Thanks


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## humble_pie (Jun 7, 2009)

dear Boris you are not going to like my takeaway so by all means please do ignore if you wish. But i'm siding 100% with the mother & i'm feeling concerned enough at her neglect that i'm posting here this one time.

the issue isn't the brother imho & it certainly isn't all those fuss budget concerns with what the CRA might do.

the elderly & ailing mother should have had a lawyer of her own from the get-go. May this be a lesson to all of us, we should get our legal affairs in good order while we still have the capability.

boris if you can unwind from the pseudo-legal contortions & if you have a charitable bone in your body, can you please find a lawyer with expertise in elder law to represent you mama.

if what you say about the brother is true, an annuity is a good idea. It "sounds" as if one could still be bought out of the growing mess that's developing.

i imagine the brother will agree if the lawyer, yourself & your mother present the idea as a done deal. The huge appeal to brother is that he'll receive the annuity income regularly & reliably from a neutral source. He won't have to go through the paper-signing rituals that you keep dreaming up, nor deal with the hostility that you so clearly express.

i'm a little doubful about the figures being shown in this thread, though. Just the brother's half of the house gift - which was to have been only half of the total sale proceeds of the house, right? - is said to be in the high 6 figures.

if bro's half of the half is therefore only one-quarter of the actual proceeds of the house sale, yet this 1/4 portion alone is worth high 6 figures, then the house itself must have sold for roughly $3,500,000, give or take?

this brings on my next concern. Houses worth $3-4 million usually mean many more $$ millions in investments & other moveable assets owned by the family. But where are the lawyers & expert advisors that such a well-to-do family would normally be retaining?

bref, Boris, i think you should stop thrashing around with these homemade pieces of affidavit scrip tout de suite. Please find an elder law solicitor to help your mother & please consider that a recommendation from the solicitor might even be that the matriarch is in no financial position to "give" her adult sons anything at this point in time.

the first item on the agenda IMHO should be whether all of her assets, including all of the house sale proceeds, need to be conserved in order to pay for her old age & possible health complications.

that's my say & now i am out, you will be glad to hear. It's just that i feel uneasy in the face of stories like this, with their whiff of elder neglect.


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## OnlyMyOpinion (Sep 1, 2013)

^+1. Well said. I began in a similar vein but gave up, so I appreciate your tenacity and clear discussion.


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## OptsyEagle (Nov 29, 2009)

No you don't need affidavits to give money away. The owner of the money, when the interest or gains are accrued will be responsible for any taxes owing, not the person the money is given to. If you want to take the taxes owed out of the gift, that is up to you and all the parties to the gift.


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## domelight (Oct 12, 2012)

1. Your mother sold her principal residence. There are no further tax implications, to whoever receive's this sum of money. If she keeps it fine, give it to you and/or your brother now or 5 years from now, you still
have nothing to report to CRA regarding the proceeds of sale of the principal residence.
2. CRA only cares about the profits realized from this money. Whoever actually earned the interest should report it to CRA. You say your brother signed an avidavite accepting the gift, so assuming
this is binding then I would think any interest earned would be prorated as applicable to the outstanding balance owed to him. (and paid to him or affecting an increase to his balance due).
-if the affidavit never happened and it's moms money then she should report it.
3. If the money is retained in mom's name, then the cash may be subject to probate should she pass away. (you can seek advice to avoid this)


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## sags (May 15, 2010)

Post deleted.........I think I will just stay out of this one.


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## spirit (May 9, 2009)

I was the executrix of my father's estate and I have 2 brothers....both with some type of addiction issues. One brother invested in a mobile home in a small town, is working and doing fairly well. The other brother took his share and spent all of it within a year. Both have fairly stable wives who try to give them the support and structure they need. One listens...one does not. Guess which one has very little respect from his two sons, and has basically no social relations with the rest of the family.
My point is that I am not god...my responsibility was to disburse the estate fairly, and as quickly legally possible. I had a lawyer and followed his advice to the letter. 
I think that talking to your brother honestly about the benefits of setting up an annuity to give him a stable income over 30 years or so as his best choice would be the best thing to do. You can explain it as letting the insurance company take responsibility for his income...it would be like a pension...and it would be non judgmental. Believe me, he is suffering from a lot of guilt and might see this as a way of absolving himself of some of the shame he is feeling.
As a member of Alanon and as someone who has been to a lot of open AA meetings....my eyes have been opened to the anguish of that terrible affliction. If I knew then what I know now...I would have done more to try to convince my brother to set up an annuity. Good luck with whatever you decide to do.


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## Boris (Aug 25, 2015)

It is stated very clearly in the act that the guardian can grant gifts, and loans as long as....
_ "the accustomed standard of living of the incapable person and his or her dependents and the nature of other legal obligations shall be taken into account." _

Secondly if I grant my child POA I still have legal right to make all decisions on my own such as granting gifts if I understand what I am doing. Also I can still legally refuse or override what my POA wants to do as well. Just because I sign a POA does not give the attorney power to enslave me against my will either. 

-----------------------
The law is:_
To be competent to make a decision, a person must

1. Understand the context of the decisions; 
2. Know his or her specific choices and 
3. Appreciate the consequences of these choices. _
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You don't have to be able to talk or write to be able competent in all 3, otherwise all mute or disabled people unable to write would have no personal rights to ascent to any of their own personal wishes in life related to their finances.
There are various exceptions to almost every law that exists and our situation falls into one of those exceptional cases. My mother is not suffering or being abused in any way under my FT care, and for those of you here who implied that, ___ ____ _____. 

P.S. Spirit, my brother feels no guilt whatsoever, he is hard core to the death.


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