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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.
 
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