Mishandling of account

[Marmee]

This is from a Wisconsin residency.

What will happen when my husband contests the acounting of his mother's estate - she passed away in the end of 1999. The executor (his brother) cashed in seven annuity checks that were sent after her death - three months worth and used them to pay for the estate bills. The executor claims that since the checks came in his mother's name, they belong to the estate.

What will happen in the court hearing on the acounting when we contest it, considering that he failed -mishandling of funds - to turn these over to the rightful owner (my husband) who has had to pay taxes on that money he never received? Will the executor be ordered to pay out of his personal expenses? What usually happens? There is no more money in the estate and there is still the attorney bill (whom the executor "fired" - executor says he will close the estate on his own.)

Thanks!
Marmee

 

[advisor10]

MAY 25, 2001

DEAR MARMEE:

(1) How can you claim that your husband was entitled to your mother's annuity checks--is he listed as a payee on the check, or did just your mother's name appear as payee?

Your brother's argument may be correct about the checks belonging to the estate. Did your husband ever cash these annuity checks before his mother's death?

(2) What company issued the annuity checks?

Normally, they are supposed to be notified when the payee has died so that they can cancel the checks or start sending the checks to another beneficiary that the payee has designated, or to the estate. You may want to contact the company that issues the annuity checks to have them check their records about what can be done. If an error has occurred, they can contact the executor to ask him to possibly refund the money.

(3) How is your husband responsible for paying taxes on money he never received?

Any tax statements (such as 1099's) he received regarding this money should have been sent instead to his mother's address, and the estate should be responsible for paying any of her taxes. If an error was made on the tax statements, then that needs to be corrected.

(4) Was there a will and has your husband received any money or property from the estate yet?

(5) What was the value of her estate?

It seems somewhat odd that the attorney was working on this estate would be fired now that the work of the estate has almost been completed. It is also odd that there seems to be no more money in the estate, unless your mother had large debts or taxes. Your husband should really make an effort to review the probate file (after this estate has closed) with a second party to see if the financial accounting has been done correctly.

Also, find out from the courthouse or an attorney whether or not Wisconsin requires its executors to be bonded. If it does, then if it is discovered later that the executor stole monies, then a claim to recover those monies can be filed with the bonding insurance company.


SINCERELY,

[email protected]

 

[Marmee]

1) My husband was named as beneficiary on the annuity. It was a POD account.

2) Northwestern Life Insurance is the company. The company was notified immediately of her death, yet they continued to send out three months worth of annuity payments. We asked them for copies and received of the seven annuity checks they sent out and the proof is there that the executor cashed them and used them to pay the estate bills.

3) The 1099 forms - sent to him as owner of the annuity account for Y-2000 - did not match with what he actually received in 2000 - so he did pay taxes on those seven checks. This is an ongoing annuity for 20 years.

4) Will - yes, there was one. Husband and brother (executor) divided the property in her apartment - already disbursed. Executor thought he had enough money in the estate to cover all bills...now not enough to cover attorney fee.

5) Value of estate according to inventory report is, I think, $20,500. All rest of the money was invested in annuities and all annunities had POD beneficiaries...passed outside probate.

6) Her will specified that the executor not be bonded.

7) Executor felt that the attorney fee was getting too excessive (lack of communication from the executor who threatened to sue my husband if he ever called him - caused attorney bills to go up as my husband had to communicate with the attorney to find out what was going on - no communication has come directly from the executor for 13 months! Executor brother is upset because my husband received a lot more of the annuities POD than he did.)

Hope this helps you to answer my questions.

Thanks!
Marmee

 

[advisor10]

MAY 26, 2001

DEAR MARMEE:

You should contact Northwestern and ask them to send a letter to the executor instructing him that he was sent the overpayments by mistake and that he should refund the monies to Northwestern. After Northwestern gets his payment they can reissue the checks properly to your husband. It was Northwestern who made the technical error of sending these payments out erroneously if your husband was not listed as the payee.

Or you could submit a letter to the estate explaining the situation about the overpayments so that at least you will have a claim on file (payable to your husband) that would be paid in case any future assets of the estate are uncovered.

SINCERELY,

[email protected]

 

[Marmee]

Thanks for the advice about writing a letter to the company. That I will do, although they are aware of it as they did send me copies of the cashed annuity checks.

Could you answer my original questions - let's say that the executor is aware of all this, but refuses to reimburse him - and it goes to a court hearing - what happens - refer to my original question. I am just curious what will be a consequence.

Thanks,
Marmee

 

[advisor10]

MAY 29, 2001

DEAR MARMEE:

How are you all going to contest the accounting? Are you going to wait until the estate is near closing? Do you have an attorney to represent you?

How much money do these annuity payments add up to?

It might be simpler to just submit a letter/claim to the probate court that mentions your request for payment of these monies (just as if you were submitting a bill) so that it can be reviewed just like all the other bills are for payment, and any discussion about the matter can be resolved in one of the probate hearings.

You might need to file a civil suit to recover these monies from the executor if the claim ends up being unresolved. But is it really worth all the trouble? Attorney fees may add up to more than the amount you are claiming.

Why are you so dead-set in favor getting this money back--is it the principle of the thing or is there animosity against the executor? Haven't all parties benefited financially from this estate? Sometimes it's better to let these matters go.

SINCERELY,

[email protected]

 

[Marmee]

Boy, you sure ask a lot of questions!

Actually, all my husband wants is for this annunity and some other monies owed him to be applied against his share of the attorney bill (the one that was "fired) and court costs in probate hearing and let it go at that. (Remember there is no attorney involved right now.)

This executor has refused to talk to my husband in over 14 months - there is hatred and jealousy from his brother (the executor) because my husband received a much larger share of the annuities from his mother than he did and also at my husband, who is joint owner - POD - of the checking account that he had with his mother, had returned to an annuity company a large automatic deposit annuity payment that came a month after her death - the executor was very upset at that becasue he wanted to use it to pay the bills - that annuity went back to the annuity company and was split three ways to the beneficiaries...rightfuly so.

We cannot talk to the executor due to threat he made against my husband that he would sue him for everything...

How sad....squabbling over money that really was given as a gift and the executor thinks of it as a right...I wish mother had given it to her church!

I am now wondering if the fact that the executor has delayed the closing - he just recently filed the inventory - - if this lack of communication can be used against him to contest his personal representative fee?

Marmee