Bob F. – Power of Attorney Nightmare
My sister was my mother’s caregiver in the last years of her life, and she was also the power of attorney for her financial affairs.
My brothers and I would politely ask my sister about Mom’s finances because we were concerned about her ability to support herself if she needed to be placed in an assisted living residence. Our sister was never forthcoming with any information, even as our mother’s health failed to a point where she could no longer communicate due to dementia.
When she died, we learned that our sister was named as executor of the will, but we were shocked to discover that, aside from a small life insurance policy and some personal effects, there was basically no money in the estate.
Getting financial details from our sister was impossible, so we had to hire a lawyer and actually go to court to compel her to produce the financial records from the time prior to our mother’s death.
We learned that our sister had added herself to Mom’s bank accounts and that those accounts – over $200,000 – had passed into our sister’s hands when she died. Her explanation was that Mom wanted to leave her a gift for all of her care while she was sick, but Mom had never said a word to me or my brothers about it.
We ended up in court to try to undo the bank account transfer and we were successful, but my sister had paid off her own debts with the money. We are still trying to collect from her, but may never see the money.
We also had to go to court to have her removed as the executor, which she fought tooth and nail. It cost several thousand dollars.
At the end of the day, my brothers and I are basically out the inheritance between our sister and the legal fees.
I’m pretty sure this isn’t what my mother planned on leaving behind – a big fight, bills and no one speaking to my sister.
If my mother had appointed two of us as her power of attorney, probably none of this would have happened, but Mom had no advice from anyone except for how to prepare her will and power of attorney. It wasn’t bad planning; it was really no planning.
John T. – I wish I’d never agreed to be executor
I was named the executor of my late uncle’s will. We were close, and he didn’t feel that his own children were capable of being impartial, so I agreed to be the executor.
What I discovered shortly after the funeral was that my uncle had a second wife, and they had four children. He was supporting both families without the knowledge of the other.
It has been more than a year since he died, and I have been in the middle of trying to sort out who is entitled to what by law. I have been to court twice for direction on what to do, but I feel like I’m no further ahead.
I’m afraid I’m going to get sued over this, but our lawyer says I need approval from the court just to quit! And they may not approve it.
I should have talked to my uncle about what to expect while he was alive. If I knew, I would never have agreed to do this.
Tom G. – Loan or Gift?
There are four kids in our family and me and my brother were my father’s executors. Our father loaned our youngest brother $80,000 for a down-payment on a house. We all knew about it – it was no secret.
The will split the estate equally between the four of us. We deducted the $80,000 loan from our brother’s share. His wife went crazy when we did this.
She made our brother go to a lawyer and the lawyer sent us a demand for $80,000 unless we have proof that Dad loaned him the money. We all knew it was a loan, but there’s no agreement in the papers Dad left.
One of my brothers is refusing to give back his portion of the $80,000 but our lawyer says we may need to give back all the money because we paid it out too soon as executors.
Now nobody is talking and my brother (the other executor) and I are trying to scrape up the money to pay off my other brother’s share of the $80,000. We probably need to sue our other brother to make him pay up, but we don’t really want to do that.
I’m not sure what exact lesson is – maybe “if you loan money to your kids, make sure you get them to sign a promissory note”. Otherwise, it’s a gift you made before you died.
Cheryl T. – My Sister’s Keeper
I was the executor for my father’s estate. My father paid most of my sister’s bills while he was alive because she had substance abuse problems. He didn’t leave her a lump sum in his will. He wanted to leave money “in trust” to help continue to pay some of her living expenses. Now I am the trustee for my sister. She calls, texts, and emails me constantly looking for money. I hate this, but if I quit, I’m afraid no one else will do it, and that isn’t what my father wanted.
Now I hear that Dad could have bought her an “annuity” that would have given her a monthly cheque without leaving it as an estate problem. Not sure why my Dad’s life insurance agent didn’t say something while Dad was alive.
I looked after my mother’s estate for free. I didn’t realize it would take me two years of hard work to do it, or I would have asked for compensation. To add insult to injury, my youngest sister got a lawyer to chase me with the personal threat of a lawsuit if I didn’t work faster to pay out the money – and I had to get a lawyer to respond to her lawyer ($1,800 cost!) to sort it out. Now I learn that I could have bought insurance that would have paid the legal cost, but my lawyer never told me until it was too late.
Joanne B. – The Cost of being the Executor
My mother made me her executor in her will. She didn’t tell me how expensive it would be to be the executor.
I couldn’t get the money from her savings and investment accounts until I got probate. It took me almost three months to get all the asset information and I had to pay the lawyer to submit the forms AND had to give a cheque for over $15,000 for the probate fee – so nearly $20,000 with the legal bills.
In the meantime, I had to pay for the funeral, property tax on the house and cottage, and insurance bills for the property and her car. I had to borrow a line of credit until the probate papers came back and I could set up an estate bank account.
If I knew all this, I would have got Mom to put some money in an account in both our names so there would have been cash available to pay these bills. What do people do who can’t borrow money to pay for all of this?
Adam J. – Our Family Cottage
My father left the family cottage to me and my eight brothers and sisters. Five of them use the place, but four of us don’t. The users want the non-users to pay an equal portion of the expenses. The tax bill alone is $40,000! Some want to sell; the others want to keep it. The ones that want to keep it can’t afford to buy out the ones that want to sell. We’re all angry.
What a nightmare. Don’t lawyers explain this stuff when they do up a will? My Dad thought the cottage would keep the kids together.
My mother’s will was thirty years old when she died at age 88. She named her older brother as her executor. He was happy to do it because he isn’t busy with much else.
The first thing he did was cancel her credit card. It had twenty years of loyalty points that just went “poof”.
Who knows what else he has in store for us – he’s losing his memory.
Julie W – My Mom’s Story
Uncle Bob never expected to bankrupt his sister (my mother) when he asked her to be his executor…and she never expected it either, especially not at eighty years old.
My Mom agreed to act as estate executor for her brother, Bob. She was honest and reliable; he trusted her to manage his estate accordingly.
Bob and his brother Mike owned a small business together. Bob had divorced his wife of 40 years about five years prior to his death and although he settled the divorce, my cousins were suspicious that their father and Uncle Mike had “cooked up a deal” to avoid paying their mother what she was really entitled to.
When Uncle Bob died, Mom obtained Bob’s financial records and began to organize a valuation of his business assets. With no experience in such a task, she hired the same lawyer and accountant that had acted for Bob in the divorce settlement. She knew that these professionals would have a detailed knowledge of the business which would save considerable legal and accounting expenses for the beneficiaries. She also agreed to waive any executor fees for her work on the estate.
After she arranged to sell the business assets to Uncle Mike, she notified my cousins of the details. They hired a lawyer and commenced a $2 million lawsuit against her as executor, and the lawyer and accountant. They believed that the lawyer and accountant were parties to some original plan to defraud their mother, and that they were conniving to do the same to the estate. Mom, as the executor, was party to this ‘conspiracy’ for using the same professionals to value the business assets for the estate. My cousins believed the estate was worth about twice the sale price to Uncle Mike.
The Court sided with my cousins, agreeing that the lawyer and accountant had a conflict of interest. Mom was removed as executor, and she could not use any of the estate money to pay the cost of defending the lawsuit.
Mom and Dad (a retired factory worker) owned a home and had a small pension but they were very concerned about the lawsuit that was unfolding.
Mom contacted the estate lawyer to ask what she should do, however, since his law firm was also named in the lawsuit he said he was unable to continue to act on her behalf. He told her she needed to hire a litigation lawyer to defend the lawsuit. The litigation lawyer reviewed the details. He advised Mom that the lawsuit was very serious. The legal bill to defend could run as high as $500,000 . . . and he required a deposit of $100,000 to get started.
My Mom and Dad mortgaged their house; by the time the legal expenses reached $200,000 they were completely desperate. Her health began to fail, no doubt from the stress of the estate lawsuit problems. In fact, when she was in the hospital, near death, she asked me if the lawsuit would end when she dies. It was literally one of her dying thoughts.
Mom named my Dad as the executor of her estate. After she died, the litigation lawyer advised Dad that as Mom’s executor, he had to either continue to pay to defend, or agree to settle with my cousins. Today, Dad is seeking more legal advice to determine his own potential liability from Mom’s duties as executor for her brother’s estate. We discovered after Mom passed away that even dying doesn’t get you out of these problems!
At this point, my sister and I know that we won’t be receiving an inheritance from our parents’ estates – that money has gone to the lawyers.