My dad died last year. My sister has power of attorney, and is now the executor of my father’s estate. My sister’s husband has taken on the role of managing my parents’ estate, which is worth $9 million. Last year, the estate made about $300,000, which is very low.
My sister and brother-in-law told me and my younger sister that our parents did not want him sharing any information whatsoever about their estate. Instead, he sent us spreadsheets as a courtesy — and he said that even this is not a requirement.
My sister and I do not think he is dishonest, but we do think he is not qualified to handle this much money. He has no legal right to do so anyway. Does he? We hate to get into a legal fight, but we want the portfolio correctly managed.
This stinks. Your sister and brother-in-law have clearly taken it upon themselves to manage an estate that belongs to all of your father’s children (if your mother is not alive) or to your mother (if she is still with us). They have no legal right to hide any figures. In fact, they have a fiduciary responsibility to act in the best interests of the beneficiaries, and you can petition the probate court to compel accounting.
“The executor will have to report all assets collected; all taxes, debts and expenses paid out of estate funds; all income collected; and all distributions made or to be made,” says Neil V. Carbone, trusts and estates partner at Farrell Fritz PC. “A beneficiary has a right to review the executor’s account and to demand documentary support for all transactions.”
“Opportunistic siblings see the incapacity or death of a parent as a land grab.”
“If something appears amiss in the executor’s accounting (e.g., certain assets were not included in the executor’s account, assets were sold at under market values, expenses appear improper), a beneficiary will have a right to object and seek a surcharge against the executor (including a reduction in or denial of compensation for having acted as such),” he adds.
Ditto your sister’s power of attorney. “The agent is always accountable to the principal,” Carbone says. “Where the principal lacks capacity, the agent will account to someone else with legal authority (e.g., a court-appointed guardian or a ‘monitor’ appointed under the power of attorney).” In other words, she must account to your mother and/or her estate.
Opportunistic siblings see the incapacity or death of a parent as a land grab. The best weapon in their arsenal is speed, as well as the presumption that their siblings will not be well enough acquainted with the law to act upon their suspicions. It may be time to hire a lawyer, and file a petition with the probate court to replace your brother-in-law as executor and sister as power of attorney.
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Quentin Fottrell is MarketWatch’s Managing Editor-Personal Finance and The Moneyist columnist. You can follow him on Twitter @quantanamo.