Executor 'borrows' money from estate?

What is the name of your state (only U.S. law)? Nebraska

My father died several years ago, and my brother was appointed executor of the estate. In retrospect, that might not have been a good decision on my or my sister's part, since things are still not completely finalized yet. My brother has been dragging his feet on getting things finalized (needed paperwork forwarded to the lawyer), and I just found out why.

He just told me that he borrowed what he considered to be his portion of the estate from the estate to prevent a foreclosure on his house...a fairly substantial amount. He said he'd hoped to get it replaced but has been unable to do so, and that he's putting together a spreadsheet to show us and the lawyer what the borrowed money was used for.

Pardon my legal ignorance, but wouldn't this be considered embezzlement? Once the lawyer receives paperwork that shows money missing from the estate, wouldn't he be obligated to alert (state?) authorities about it? And who would get to decide whether charges should be filed against my brother? Is it up to my sister and I or is this decision out of our hands?

And what would happen next? If charges are filed, would my sister or I then be asked to take over as executor? And if charges are filed, does this mean that the estate still cannot be settled until the money my brother took has been paid back? What if he is unable to do so? What happens to the balance of the estate?

While all fiduciary duty alarm bells should ring when a trustee/executor borrows money, it is not a per se breach to "borrow" money.

If there is a note and adequate security, it would not be a breach. However, *many* things related to such can be a breach. It is extremely unwise, even with adequate documentation, for a fiduciary to borrow money if a beneficiary might object.

Absent other facts, it is unlikely there is a criminal problem.

OF COURSE IT CONSTITUTES EMBEZZLEMENT!

("Absent other facts"? What facts? And what else would it be called - a do-it-yourself-loan?)

The offense of embezzlement is defined as the fraudulent conversion of another's property by a person who is in a position of trust.

The crime was committed when brother dipped into the estate’s funds and converted the money to his own use. What his other intentions were at the time are inconsequential. Is it a defense for a bank robber to claim that he intended to pay the money back?

Incidentally, you won’t find the crime of embezzlement separately treated under the Nebraska criminal statutes. In your state “larceny embezzlement, extortion, fraudulent conversion, receiving stolen property and the like” are all classified as theft. Nebraska Revised Code Section 28-510. Consolidation of theft offenses.

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You say that it was a considerable amount of money. Well, then if charged, he is looking at these:

NRS 28-518. Grading of theft offenses; aggregation allowed; when.
(1) Theft constitutes a Class III felony when the value of the thing involved is over one thousand five hundred dollars.($1,500.00)

NRS 28-105 Punishment Class III felony Maximum — twenty years imprisonment, or twenty-five thousand dollars fine, or both

would my sister or I then be asked to take over as executor?

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No! No one is going to ask. (Incidentally, in Nebraska his title is that of the personal representative, not the executor.)

But you and your sister definitely need to petition to have brother removed and the two of you substituted as co personal representatives.

I can understand some reluctance to press charges, but what I don’t understand is why you two have permitted him to remain as the personal representative knowing that he has already stolen from the estate.

My guess is there is more money missing than you are aware of.

so, did he end up "borrowing" more money than he really is expected to get from the estate? If not, while a crime was committed, there is no true loss. If he borrowed more than he is expected to get, then he took your money too. What do you want to do about it?

latigo, you claim great knowledge, but you seem to state things with high certitude which are wrong. Why is that? Is it some personality defect, or, is it incorrect about how much knowledge or experience you have?

"Stolen", how so? Good luck with your theory. There are *A LOT* of facts needed before the police will even care, let alone a court find a felony.

Please, advise us of the elements which can be proven from the facts *given* which will send a person to prison. Good luck with that. Just out of curiosity, are you retired? If so, it certainly guides my thoughts about how you seem to have a certain.....lack of understanding of the process.

While I think there is an...well, I said what I think. I do know, that a call to the police with these facts will not leave the OP satisfied.