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Handing of bank account by personal representative.

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t74

Member
What is the name of your state? TX

Parents held assets jointly and had wills that stated that any separately owned property went to the survivor. After that to the children per stirpes; only one child has children.

When father died, the child acting as personal representative substituted own name for the father's on financial accounts so that accounts were now in the name of ownership of mother and this child. This was not discovered until after the death of the mother. It had been assumed that the child had signature authority (but not ownership) on the mother's account

Mother has now passed as well. The child is claiming the jointly owned accounts as her own. It is unknown the POD of the joint accounts.

Child has also supplied own personal representative with information on parents' estates while not providing any information to other child who is the successor personal representative per the will.

Child is disposing of mother's property without notification to or approval of the other child.

Mother was incapable of handing her own finances or making informed decisions on financial or legal matters due to advanced age and past history. This can be demonstrated by detailed letter of instruction to the children from the father. PR child could exercise undue influence on mother.

Now for the questions:

Does the prior change to the bank accounts ownership transfer all funds in the accounts to the child named on the account or does the account get divided into two parts and the mother's part get divided according to the POD or the will? I assume that since the mother initially agreed to the addition of the child to what was then her exclusive accounts that she gifted the child the half share of the funds in the accounts. Should these have been reported to the IRS since the amount exceeded the annual gift exclusion?

What should be done about someone other than the personal representative and successor PR having the estate information including access to the mother's safety deposit box?

What should be done to keep PR child from gifting mother's possessions without permission of the other child?
 


Taxing Matters

Overtaxed Member
Your post is not clear. First you say that the PR somehow added her name to the account, then you say the mother allowed her to add her name to the account. Which is it?

If the mother consented to that and the mother was competent at the time, then the mother presumably knew that she was allowing the PR access to the funds in the account. In that case, it would matter what agreement they had, if any, about what the PR could do with her access to the account. Note that under federal tax law it is not adding the PR to the account that results in a gift (unlike adding someone to a deed for real property). It only becomes a gift when the PR takes money out to use for her own benefit rather than the mother's benefit.

It would be important to know, too, how the account is held. In my state and others I'm familiar with banks by default set up joint bank accounts as joint tenants with a right of survivorship (JTWROS) rather than as tenants in common (TIC). If the account was held as JTWROS then it become the PR's money the moment the mother died. That money would not be subject to the will or probate in that case.

If she is appointed by the court as PR of the mother's estate then as to the estate assets she runs she show. She must follow the will, but she does not need to get consent from the beneficiaries for every move she makes. That would defeat the purpose of a PR in the first place. The PR may need to give periodic accounting to the court and beneficiaries of the estate activity. And beneficiaries may contest the actions of the PR that they believe do not follow the probate law and the terms of the will. The beneficiaries would want to see a probate lawyer for help with that.
 

t74

Member
Thank you for your reply.

Mother was very elderly (in 90s) and unable to handle simple financial transactions such as paying bills and would have been unable to comprehend the effects of adding child to the account. Father handled all financial and legal issues until shortly before his death. Mother had not been declared incompetent by the court or had child appointed guardian. PR would have had to accompany mother when dealing with financial and legal advisors and bank representatives; mother was incapable of driving or obtaining other transportation to meet with them. Family had been trusting that the PR child would act ethically. It was only shortly before mother's death that some became suspicious from casual communications. It is only after mother's death that the complete picture is emerging.

It is unknown exactly how the account is held; PR has not provided this information to the other child. PR has provided this information to own PR for this individual to act as successor PR when the non-PR child was so specified in the will. This information was just discovered. Non-PR child has detailed letter of instruction from father regarding financial and legal matters. PR has not provided any accounting on either estate.

Parents were paying some PR's home expenses in lieu of rent. This was to continue per father's instructions after his death. It is unknown whether this continued after mother entered care facility. This was done from the joint account. It is believed some recent home improvements were paid from joint account under the theory that the home was still mother's legal residence even though mother had not resided there for years. PR could not have afforded the house following divorce had parents not contributed to expenses. It is unknown what other financial considerations were made to PR from the sale of their home..

It is known that PR used mother's credit cards but it is unknown what all was charged. These would have been paid from joint account. These expenses have been so commingled that it would be nearly impossible to separate them. Father had provided detailed list of what was to have been paid from this account in his estate instructions.

The appointment as PR is by the will which has not been filed with probate court. There appears to be no real estate remaining. The only items remaining are bank accounts, a life insurance policy, and personal property which were specified by father to be shared if mother predeceased him. It is expected mother's will mirrored his. No inventory has been made of property, safety deposit box or other assets. PR began gifting personal property less than 24 hours of mother's passing. PR had prior to mother's death had attempted to gift funds from the joint account without the consideration that mother might have been subject to Medicaid lookback at some point. It is expected that PR will do so at this time.
 

t74

Member
At the time of the addition of mother's PR to parent's account, the PR was acting as father's PR.

It is doubtful that much, if any, of the funds are in IRAs and 401Ks
 

Taxing Matters

Overtaxed Member
The appointment as PR is by the will which has not been filed with probate court.
Has probate been opened and this person appointed as the estate personal representative? If the answer is no then she has no authority to give anything away. In that case, someone needs to open probate and get appointed as the estate personal representative. The will also needs to get lodged (filed) with the probate court too. Then the personal representative can go after her for any assets that she improperly distributed. The sooner action is taken the sooner she can be stopped from what she is doing.
 

t74

Member
Probate has not been opened on either estate. Since there was no real estate or conflict (until now), it was believed to be unnecessary at the time of father's death and PR had the advice of an attorney (likely the one who drew up the wills as they were approximately a year old at the time). There would have been no reason to replace mother's will upon father's death due to the text of the document.

PR choice designated in will according to father's notes. Non-PR child has copy of father's will. No one other that the current PR and perhaps their POA and prospective PR (not even a family member) has a copy of mother's will. In the past similar documents have been mirrors with surviving spouse the PR, one child primary successor PR and the other secondary PR and then reversed for the other parent,

A family member local to the residence of the mother will be sent to file. Unfortunately the secondary PR named in the will lives at a significant distance.

Thank you.
 

Just Blue

Senior Member
Probate has not been opened on either estate. Since there was no real estate or conflict (until now), it was believed to be unnecessary at the time of father's death and PR had the advice of an attorney (likely the one who drew up the wills as they were approximately a year old at the time). There would have been no reason to replace mother's will upon father's death due to the text of the document.

PR choice designated in will according to father's notes. Non-PR child has copy of father's will. No one other that the current PR and perhaps their POA and prospective PR (not even a family member) has a copy of mother's will. In the past similar documents have been mirrors with surviving spouse the PR, one child primary successor PR and the other secondary PR and then reversed for the other parent,

A family member local to the residence of the mother will be sent to file. Unfortunately the secondary PR named in the will lives at a significant distance.

Thank you.
Who are you in all this T?
 

t74

Member
Sorry for the delay. I spent the day reading up on TX probates and talking to an attorney. I am the spouse of nearly 50 years of the non-PR child trying to get the two children a plan to undo the mess that exists in part because they - actually Mother - failed to probate Dad's estate and also because of the acts of the other child dispersing the probate estate without authority. There is a now a plan of how to start.

I knew none of the three paid attention to detail, had the time, and/or was capable of doing the work needed if left to their own schedule and should have been more proactive on my spouse to make sure things were taken care of. A word to the wise ...

I was PR of two estates in other states ten times as large as these with more heirs - including one problem one who still gets resent all of the paperwork upon complaints now that there is no more in her account- and complexities but had the benefit of very good legal and financial advice. I don't need this aggravation!

Thanks for listening.
 

t74

Member
More on saga

There are grandchildren and great-grandchildren who all had a good relationship with the late parents. Even though most lived at great distance, they made special trips to visit the grandparents/great-grandparents. One frequently drove over 1000 mi round trip to help with home repairs, moves, etc. There was no reason to disinherit these individuals in favor of friends of the PR.

No filings have been made with the county probate court. The PR was encouraged to meet with an attorney with the consultation fee charged as an expense to the estate, but she has apparently not done so based on her conduct in handling the estate. The will disinherits anyone contesting the will. The issue is not contesting the will but questioning the child's conduct as PR. The will seems to forgive a PR's mishandling of the estate.

Estate could not be filed under TX small estate affidavit since wills exist. PR has the originals of the wills and refuses to grant other beneficiary access to them or other estate documents of the deceased parents. It is likely that the value of the remaining probate estate is less than $5,000. The original probate estate was likely between $20-50,000. Much has been apparently been spent on legitimate expenses but other funds have likely been spent on PR's home improvements claiming that the mother needed to see them on her infrequent visits to the home and gifts to non beneficiaries of the estate.

The majority of the estate is in the brokerage account for which the PR substituted her name for the father's name as co-owner and not just someone with signature authority; it is believed that the original beneficiaries of that account were the two children. It is unkown if the other child remained as sole beneficiary of the account or whether PR friends were substituted in whole or part. Mother would have been unable to understand the consequences of any changes being made

PR of estate has refused to provide any information or accounting on either estate to the second beneficiary but has provided everything to a friend (a former step-child, PR divorced) tasked with being PR's PR. PR has failed to distribute property per the specific bequests PR has not given other child anything other than 3 specifically requested items and the.photo albums of the great-grandchildren. These items are of sentimental value and are worth much less than $200 and likely less than $100.

PR announced that the money remaining in the estate bank account will be gifted to a charity without obtaining consent from the other beneficiary. In the past, she and mother had made significant tax deductible gifts including the other child's property to charity and failed to obtain the necessary tax documents for the second child to claim the tax deduction. There is no reason the believe that PR would not claim the entire deduction for herself. It is not the second child's desire to make that donation. The funds are a small part of the tens of thousands spent by other child due to actions of PR and mother.

Now for the questions

Since the substitution of PR for father on the account was not discovered until after mother died, it is unlikely that anything can be done to compel PR to distribute that account per the desires of parents prior to father's death. It is expected that there is not enough proof of undue influence and elder financial abuse from the checking account and credit cards which could likely be demonstrated by records from these accounts based on what has been learned since the mother's death.

Is there any way for non PR child to obtain the chain of ownership and beneficiaries of the brokerage and bank accounts? It is expected that PR has substituted her friends as the beneficiaries of the accounts. The question is when all of the changes to the accounts occurred.

Should more be done other than notifying PR in an email/letter that the other beneficiary does not consent to gifting to the charities of the remaining probate estate? What should be done if she does so given that the wills basically give PR carte blanche to do what the PR desires even though the will specifies that the estate is to be equally divided?

ETA: Is there any way to compell PR to provide an accounting of the estate without spending a fortune?
 
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Dandy Don

Senior Member
What year did the father die and what year did the mother die?

If father had any assets at the time of his death, probate should have been done for him and it was perhaps a mistake not to have done so.

Since you admitted that probate has not been done on either estate, the person you are calling PR is technically NOT a PR, since an estate would have to have been opened before PR would be given a document called Letters Testamentary that would have given PR to handle/manage the assets of the estate. Since PR did not have legal authority to change ownership or beneficiaries of the brokerage account OR OF ANYTHING ELSE, her actions need to be examined and challenged. Assuming that there were no guardianship proceedings for your mother or your father, then it seems the only way that "PR" could have assumed that she had authority to change anything is if she had a POA. Do you know for sure if your father and your mother had each given the "PR" a signed power of attorney?

If she used the POA as an excuse/justification to add her name to the brokerage account, then that action is probably illegal according to Texas law.
This might be considered abuse of power of attorney or elderly financial abuse. Consult with a family law attorney to find out if you would have to file a separate lawsuit (not related to probate) to get the brokerage account transaction unraveled and corrected, or whether this could be done during probate.

"PR" may be deliberately withholding the will because she may feel it is not necessary to open probate and to explain to the court the questionable behavior of this "PR" so you can object to her being appointed as such. However, it would be to your advantage to get probate opened up anyway, in which case "PR" can be compelled to produce the will.

Your attorney is eventually going to have to examine each transaction she did with each asset to correct the mistakes that occurred.

She is going to have to face serious legal consequences for her disturbing behavior. She can't be compelled to provide an accounting of the estate assets (since there technically was no estate), but if she was granted POA it is possible that Texas law might require her to provide an accounting of all transactions since she got the POA.
 
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t74

Member
Father 2011 and Mother 2019. There is an issue with the delay in filing for Father. All property (there was no real estate left AFAIK) was left to Mother. Based on the information provided before Mother's institutionalization, it is believed that bills and purchases were being properly handled until that time. After that time little information was provided, and PR had to be dissuaded from gifting funds that would affect the Medicaid lookback if that ever became necessary.

Opening probate requires an attorney in her county of residence unless a a Small Estate Affidavit can be filed. The wills disinherit anyone contesting the will and indemnifies the PR from improper actions in the course of settling the estate. It would be easy for her to obtain character witnesses since she is a long time school teacher now at an elite private school and a church elder. Other side of the family has no relationships in Mother's community. Following Father's death it was determined that it was in Mother's best interests to remain in her long time home community rather than moving 500+ miles away.

Thank you for telling me what would be necessary to challenge her actions. I will discuss this with family to see if it is worth it emotionally to pursue the legal actions required. I would expect if she met with an attorney, she would figure out that she could be in a lot of trouble
and would at least file the probate correctly and replace the funds improperly used for her behalf even if she does not"fix" the brokerage account ownership. Since Mother was not declared legally incompetent even though she was, the claim wold be that Mother agreed to the ownership change since Mother was likely at any meeting even though she would have had no idea of the long tem effect of what she was agreeing to. Undue influence is obvious but difficult to prove due to her community relationships.

At this point there apparently are insufficient funds to pay a significant bill; outstanding bills are the reason for not closing the estate until next year. I do not want us to be responsible for paying for her mismanagement which could be claimed since she is acting in both names but without consent. The estate need to be properly closed.

Thanks again, DandyDon.
 

Dandy Don

Senior Member
Did your mother issue a POA to the PR?

Do you all know who is the beneficiary of the life insurance policy is? Let's hope and pray that the PR did not change the beneficiary designation on that.

She can not be indemnified by a will, and anyway her improper actions occurred before the settling of the estate.

She will NEVER file to open probate because she knows that the filing of probate will reveal and expose her illegalities.

If you or your attorney file for probate and sister is disqualified from serving as PR, whoever IS named PR would also have the huge advantage to have the legal authority to order all documents from the brokerage firm, the bank, and the life insurance company, etc. that would help you all put the pieces of this puzzle together so you all can determine exactly what has happened, specifically what she did wrong and how she broke the law. It may not necessarily be abuse of POA, but may be theft.

Your mother, while alive, could have requested an accounting from the PR if a POA was granted, but I don't know if anyone else could have had the right to do that.
 

t74

Member
I don't know about POA. Beneficiaries of 10K life insurance and IRA were not changed. The brokerage account is several $100K and by far the largest asset. It was expected that PR would get signature authority and not co-ownership of the accounts since Mother could not even pay monthly bills on her own much less handle core complex transactions.

It is a very interesting point that the issue occurred before death of Mother. That may make it worthwhile to pursue probate.

I had hoped there would be a way other than probate and filing to be PR to obtain the financial records. Actually, it current PR opens probate at this late date, it should be possible to object to current now acting as PR receiving court appointment based on her inappropriate actions after death that we can document. Had there been the need to pursue Medicaid, these would have been an issue with the lookback provision.

Thanks again, you have given me an idea of questions for the attorney.

Do you have any advice as what can be done to prevent this type of thing to happen in an estate. All I can think of is a trust that becomes irrevocable upon death. Would a trust for a couple become irrevocable upon the death of one or just both? The other concept I understand is a life insurance trust where the surviving spouse received the benefit of the income but the principle of the trust remains toi benefit the children and is disbursed after the death of the second person. Unfortunately, the one I saw in my family was nearly 30 years old and did not allow access to the principle should the surviving spouse need it and was done for estate tax purposes and not to prevent the problem in this estate.
 
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