Dear Liz: Our mom did a wonderful job of preparing her estate, but she made a mistake in that she started giving away her real estate holdings to her two children a few months before her untimely death. She died before she had the chance to equalize these transactions. As her son and executor, I equalized the real estate after her death. My sister is now protesting this because she said “legally” what was given away before death is not part of the estate, but I say that our mom would have wanted this equalized because she was very firm in her belief that her assets be divided equally. What’s your experience?
Answer: You just provided an excellent example of why it can be problematic to have an executor who has a personal stake in how an estate is settled.
You wouldn’t be the first executor to decide that what Mom really wanted was for you to reap a larger benefit than your sibling, despite the explicit terms of a will or trust. Even if the estate documents gave you some discretion, you should have consulted an estate-planning attorney before deciding to help yourself to a bigger portion of your mother’s assets.
This is more than an ethical issue. Executors have a legal responsibility known as a fiduciary duty to the estate and all its beneficiaries. Basically, that means acting with the utmost integrity and putting the interests of the estate and beneficiaries ahead of your own.
Your sister may be able to file a lawsuit against you or ask a court to remove you as executor. You shouldn’t let it come to that. Talk to an attorney now about the best way to resolve this situation amicably.
I’m confused. How is he helping himself to a bigger portion of his mother’s assets if he is equalizing the real estate?
He needs to follow the will’s instructions. If it says to split everything equally, he can’t take a bigger share than his sister–even if she got more while Mom was alive. The word “equalize” makes it sound fair, but executors have to follow the will.
Kindred,
Mom started giving away assets before she died, and (presumably, because she’s the one complaining) his sister got more than he did at that time. Then she passed away, and he divided up the estate in such a way that everything (including what she had given away before her death) came up equally between the two kids.
example: estate before dearth is worth 50k. Mom gives sis 10k.
estate is now worth 40k at the time of mom’s death.
brother should give 20k to him and sis, but he gives sis 15k, and himself 25k.
Regardless of her intentions, unless it was written down, he messed up. You have to go by what is written down. What I’m hearing sounds like a very ugly fight.
(Though, my guess is that if the roles were reversed and sis got a bigger share, she wouldn’t have complained a whit.)
A word to the wise: when it comes down to estates, consider: how much money is your sibling worth to you? Is a certain dollar figure or object worth irreparably damaging the relationship?
I don’t see that the brother/executor got a larger piece of the estate than sister by equalizing the assets each received. By equalizing, he received the exact same share as sister (who received part before their Mom passed away). I understand abiding by the intentions of the deceased, so if sister wants to go to court, I think she’d lose because a judge would take into consideration all the facts, not just the contents of the will.
If the will has some wiggle room for executor discretion, then a judge might say okay. Often the wording is pretty specific. If there is wiggle room, Sister could easily make the argument to the judge that Mom wanted her to have more while she was living–whether because of favoritism, or Sister needed the money more, or whatever. After all, we only have Brother’s word that Mom wanted everything 50/50. The difference is $50,000, so probably not worth a court battle, but the executor should have gotten legal advice before he divvied things up.
It sounds as if Mom gave sister her share before Mom passed, but brother/executor didn’t get an equal share when Mom was alive. There are only two children. So now sister wants half of what’s in the estate, in addition to what Mom gave her when she was alive.
As Mark Twain said, you never really know a man until you’ve divided an estate with him.