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Difficulties with co-executor of will
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# 1
Feelingwideopen
Old 23-01-2011, 7:22 AM
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Default Difficulties with co-executor of will

Any help or advice you can give is really appreciated. I am having difficulties with my brother who is co-executor of my Grandfather’s estate.

My Grandfather gave me 20k to “look after” for him to pay bills etc should his health decline. He retained around 10k in other accounts and a property worth 150k as his only other assets. I made my brother aware of this.

I put the funds in an account in my own name. During a period of falling interest rates I then moved this money, in tact, through several other accounts with various providers in pursuit of the best rate. With one bank I held around 20 different “jam jars” in my own name. The funds moved in tact through some of these buy because all these accounts have since been closed I don’t know which ones. Foolishly I checked closing statements for reasonability and, being paranoid about ID theft, shredded them.

My Grandfather asked me to share around 5k of the money with other family member as a gift from him and also to pay some bills with some of it. There was also the occasional other request for small gifts.

Rather foolishly, I documented nothing.

My Grandfather’s health declined and I made arrangements to pay other bills such as care home and property related costs.

When he died around 10k of the original 20k remained.

When we set about winding the estate up, my brother took charge of practical things like house clearance and I called in the funds from my Grandfather’s bank and building society accounts. I added the proceeds to the remaining 10k in an account in my name because trying to open a proper executors’ account with any bank had proved impossible.

We obtained probate based on the assets in my Grandfather’s name at the date of death (not including the 10k that remained in my name).

After a number of delays, we have now started to distribute the funds to the half dozen beneficiaries named in the will. There is no dispute as to who is entitled to what.

My brother has now made a demand for an audit trail of the funds entrusted to me by my Grandfather for the 18 months or so prior to his death. My record keeping is virtually non-existent and while doubtless I can obtain copy statements I’m not sure that I can recall what every payment was for. I have left myself quite exposed to allegations of theft during this period. While my brother hasn’t made the allegation, this is clearly where things are heading.

From death onwards, every transaction is clearly documented.

I have argued that it is unnecessary to rebuild the audit trail prior to death as arrangements with my Grandfather were informal and I was merely acting in good faith on his behalf. But the demands to provide the information on the accounts in my name continue.

I can’t undo my foolishness in my failure to keep proper records and would strongly recommend to others that they don’t inadvertently put themselves in the position I now find myself in.

While I can make the request for copy statements etc to the banks involved next week, and I believe the costs can be picked up by the estate, I won’t be able to 100% explain every transaction. Poor records, imperfect memory and excessive movement of funds in pursuit of a better return being the main problems.

What can I do?

Is this audit trail prior to death necessary?

At the moment I wish I'd just claimed the money was a gift and pocketed it for myself instead of returning it to the estate.

Last edited by Feelingwideopen; 23-01-2011 at 7:25 AM.
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# 2
martinman3
Old 23-01-2011, 10:46 AM
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I should say that I am no expert in these matters and I am assuming that you and your brother are the only executors.

If you were not an executor yourself then you would have cause to worry but quoting from the book I have on the subject "Co-executors have equal powers and none is senior to any other"

Your grandfather appointed you as co-executor in his will because he trusted you, it seems that your brother does not. If he thinks that you have spent the money on yourself I would start by getting evidence of just how expensive the care home fees were. If you were given 20k, you can show that the bills and the gifts to family were approx 10k and you had 10k left I don't see how he could see that as a problem.

The answer to why this is happening could be related to whether you were treated equally in the will.

p.s. Is it your brother or a solicitor making the requests ?

I should also add that you may get more help if you post in another area of the site such as the Moneysaving in Marriages, Relationships & Families http://forums.moneysavingexpert.com/...splay.php?f=24
Unfortunately, there is no specific forum for legal questions.

Last edited by martinman3; 23-01-2011 at 10:52 AM.
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# 3
Feelingwideopen
Old 23-01-2011, 10:51 AM
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Quote:
Originally Posted by martinman3 View Post
I should say that I am no expert in these matters and I am assuming that you and your brother are the only executors.

If you were not an executor yourself then you would have cause to worry but quoting from the book I have on the subject "Co-executors have equal powers and none is senior to any other"

Your grandfather appointed you as co-executor in his will because he trusted you, it seems that your brother does not. If he thinks that you have spent the money on yourself I would start by getting evidence of just how expensive the care home fees were. If you were given 20k, you can show that the bills and the gifts to family were approx 10k and you had 10k left I don't see how he could see that as a problem.

The answer to why this is happening could be related to whether you were treated equally in the will.

p.s. Is it your brother or a solicitor making the requests ?
Yes, we are the only executors. The will make a slight differentiation in my brother's favour, but nothing significant.

My problem is that it is all very approximate. My failure to keep records is scaring the hell out of me at the moment. If I'd simply left the money in a single account life would be a lot easier right now.

It is my brother making the requests.

Thanks for the reply.

Last edited by Feelingwideopen; 23-01-2011 at 10:54 AM.
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# 4
nrsql
Old 23-01-2011, 11:45 AM
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Another way of looking at it:
Your grandfather made you a gift of 20k. You kindly paid for his expenses out of your own pocket and now want to pay 10k into the estate for distibution (from your own funds).
Maybe it would be easier not to donate the 10k if your brother is making it difficult?
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# 5
cloud_dog
Old 23-01-2011, 12:37 PM
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Quote:
Originally Posted by nrsql View Post
Another way of looking at it:
Your grandfather made you a gift of 20k. You kindly paid for his expenses out of your own pocket and now want to pay 10k into the estate for distibution (from your own funds).
Maybe it would be easier not to donate the 10k if your brother is making it difficult?
Yes but....... I suppose the difficulty for the brother is that there isn't (???) any record of the original transfer, it could have been 30k, and also has the OP benefited in anyway from the money.

The brother may just be trying to do things by the book but when it comes down to money it invariably gets messy.

Unfortunately I think the OP needs to do what they planned, i.e. get duplicate statements and then hopefully most of the withdrawals are fairly obvious and the others will need to be validated.
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# 6
Feelingwideopen
Old 23-01-2011, 1:11 PM
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Quote:
Originally Posted by nrsql View Post
Another way of looking at it:
Your grandfather made you a gift of 20k. You kindly paid for his expenses out of your own pocket and now want to pay 10k into the estate for distibution (from your own funds).
Maybe it would be easier not to donate the 10k if your brother is making it difficult?
This is more or less how I've been looking at things. Naive, yes.

Not "donating" the 10k? Tempting, but really not morally right. I never viewed the money as mine.

Reconstruction would have been so much easier if this had been requested prior to us agreeing a probate figure (which this money was excluded from).
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# 7
getmore4less
Old 23-01-2011, 1:37 PM
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IANAL but it look like this to me.

It probably should have been treated as some form of trust or as a gift or as a cash asset.

If a gift, when did you get the money, if less than 7 years ago it should have been include in some way on the tax return as a gift?

If you are both happy you have not made a mistake and it does not form part of the estate then as an executor of the estate he has no legal right to request you do anything.

Also all your payments you have been making now become gifts from your estate, if you wish to distibute the money in line with the will then hats your choice.

If there should have been some sort of trust there might be income tax implications for the time you held the money

If you decide you have made a mistake you may need help from HMRC on the implications for taxes.

The probate should not be an issue, thye only care about the IHT due(still none) and if you are legaly entitled to be executors.
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# 8
Mojisola
Old 23-01-2011, 1:37 PM
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As your Grandfather gave the money to you and it has been in your name, then it isn't part of his estate. You don't have to provide any record keeping to your brother.

In fact, I don't see how you could account for it. You can't add something back into the estate after someone has died.

The only problem that may arise from the gift is if your GF was claiming means-tested benefits after giving you the 20,000. After checking that none of it is going to be claimed back for over-payment of benefits, I would distribute the money as your GF wanted as a direct transfer from your account to theirs.

You could point out to your brother that if you were really untrustworthy, there would only be about 50 left from the original 20k!
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# 9
Feelingwideopen
Old 23-01-2011, 2:22 PM
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No issues with means tested benefits or IHT as a result of the transfer of funds.

Last edited by Feelingwideopen; 23-01-2011 at 2:51 PM.
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# 10
theoretica
Old 23-01-2011, 8:13 PM
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Can you go back to every bank you think this money passed through and request statements? I don't know if these would be covered by a SAR (which I think costs 10) or if you would need to pay whatever they wish to charge.
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# 11
Feelingwideopen
Old 23-01-2011, 8:38 PM
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Quote:
Originally Posted by theoretica View Post
Can you go back to every bank you think this money passed through and request statements? I don't know if these would be covered by a SAR (which I think costs 10) or if you would need to pay whatever they wish to charge.
The answer I suppose is yes. The problem I have is that funds have passed through different current accounts and different savings accounts on their journey to being repatriated with the estate.

Within one bank I jamjarred personal funds though a high number of accounts too. So identifying which account is which is going to be one hell of a job. Then identifying and recalling what the transactions were for ... nightmare!

I'm liking the DPA idea to save on copy statement fees. That said, I really would prefer my brother not having the opportunity to trawl through my personal finances.
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# 12
mike88
Old 23-01-2011, 10:15 PM
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Your grandfather's estate is comprised of his assets on the date of death. He trusted you (not your brother) to pay relevant expenses. Your brother has no right to question how you spent this money as that was an arrangement solely between you and your grandfather. In other words what happened prior to your grandfather's death has absolutely nothing to do with him.

Arguably the balance (ie the 20000 less expenses) would form part of his estate as that technically belonged to your grandfather as it was not a gift to you purely a float for you to deal with his expenses. So, if you tell your brother the amount left after paying your grandfather's expenses that is all he has the right to know. He can like it or lump it but that is the position.

There are potentially other issues however. Did the act of giving you the money for his expenses in any way affect his benefits and if the money is to be treated as a gift as some may have suggested that should have been declared as part of the Probate process?

Last edited by mike88; 23-01-2011 at 10:18 PM.
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# 13
Mojisola
Old 23-01-2011, 10:18 PM
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I really think that unless you can account for almost every pound spent on behalf of your GF to your brother's satisfaction, you should take the stance that the money is in your name and you don't need to explain yourself to him. This was an arrangement between you and your GF. There is no legal position for this money to be accounted for as part of the estate.

If you start trying to account for it and can't explain it all, this could drag on for years.
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# 14
cloud_dog
Old 23-01-2011, 11:43 PM
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Quote:
Originally Posted by Mojisola View Post
....you should take the stance that the money is in your name and you don't need to explain yourself to him.
Yes, but it is the OPs brother, I'm sure the OP would quite like to continue having a brotherly relationship with him after all this is resolved.
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# 15
Loughton Monkey
Old 24-01-2011, 12:06 AM
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I can only believe that the 'technical' answer to this is as follows:

1. The money was not yours (as you admit) since it was passed to you to 'look after'. The fact that it was invested in your name is not a big issue - further proven by your disclosure.
2. It is the legal duty of executors to trace the entire estate. You have disclosed freely that of the 20K passed over, and you declare that 10K is left, but have no audit trail.
3. Assuming all other assets have been traced satisfactorily, it remains for the joint executors to satisfy themselves to all reasonable limits that 10K is the legitimate remaining total - and that there is not another 10K (possibly some interest) hiding away somewhere.

And now the 'practical' situation as I see it.

As executors, you should keep the documentation of how the estate was valued and distributed. I believe that a 'ball park' reconciliation is surely possible? Copies of statements. You gave 5K (plus) away. Surely you know to whom, and the recipients can confirm this in a note? And surely you can remember (or guess) in fairly round figures how the money might have been spent.

So why not attempt to write down a form of reconciliation - rough dates and amounts - that would balance to the amount you have remaining. It is only common snese (and good administration), after doing all of that to the best of your ability, to finish with a signed statement.

"I, F W Open, declare that Grandfather Open asked me to look after 20K and to make various disbursements, which have been documented roughly. I confirm that all documentation has been destroyed, but also confirm that the amount of 10,XXX [exact amount left] is the complete value of funds remaining, and that all other funds, and interest, have been spent entirely at the instructions of.... or for payment of.... solely in connection with G/Father..."

I don't think anyone could criticise a will completed in this way.

Of course that is not to say that people who know about this (including your brother) won't have a perfect right to be 'suspicious'. But you know that. And the level of suspicion can be minimised if you can reconstruct at least some of the audit trail, which will obviously help to dampen suspicion about the others, as long as they look 'reasonable'.

I have done similar myself, although in my case I am passionate about documentation and can prove anything. [My father - quite illogically - had very little savings but was paranoid that his pension would be cut down if they found this 500! I invested it in my own name, in a high interest passbook account and of course, on his death, told my brother about it, put it into the estate along with the passbook in the 'documents'. I am also looking after a rather substantial sum for another relative currently. The reasons are not similar. But relates merely to the fact that this relative cannot/does not use the Internet. Thus we have set up Internet accounts in his name and in both cases, money can only be transferred to/from his current account - which is not an Interent account and I cannot access it. So it remains officially and firmly 'his' money, but I do the 'Internet Management' on his behalf. Not illegal (as far as I know), and of course I keep printed audit trails/statments etc.]

Last edited by Loughton Monkey; 24-01-2011 at 12:10 AM.
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# 16
Feelingwideopen
Old 24-01-2011, 7:51 AM
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Thanks for everything posted so far.

I think I need to get to the bottom of my brother's fears. Perhaps he thinks I've misappropriated funds. Perhaps he's concerned that other beneficiaries may cry foul and expose him to blame as executor (as well as me).

It's a totally unexpected situation. I didn't see it coming although I really should have thought about it more clearly at the time.

I think the rough reconstruction is probably the way forwards but would welcome any other views. It's gonna be a nightmare.
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# 17
Clifford_Pope
Old 24-01-2011, 8:47 AM
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Been there! The voice of experience says it may not be the brother himself, but some solicitor friend who has prompted him to be over-zealous.

I can't see that statements will prove much. Even if you find the original statement showing 20,000 paid in, it doesn't prove you didn't have other money that you paid into a different account.

Surely what might be easier to prove is where the money went, outside all the various bank transfers? Even if you haven't kept the care-home bills, you can find out what the charges would have been. Make a list of all the expenses, put estimates are actuals where known, document where you can, and see if it adds up to 10,000.
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# 18
Mojisola
Old 24-01-2011, 9:17 AM
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Originally Posted by cloud_dog View Post
Yes, but it is the OPs brother, I'm sure the OP would quite like to continue having a brotherly relationship with him after all this is resolved.
This cuts both ways. If the brother can't accept that Feeling has spent the money honestly and entirely for their GF's benefit and is insisting that every penny is accounted for retrospectively when the money isn't even part of the estate, I can't see that he will be satisfied by any audit trail produced.

As the money has been moved around between accounts, Feeling says that his brother will have to be given access to his own personal spending in order to see what's happened to it. This is taking things too far in order to account for money that isn't even part of the estate.

All the executors need to show is that 20k was given to Feeling x years ago. As there are no IHT or benefit implications relating to the gift, their obligations stop there.
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# 19
mike88
Old 24-01-2011, 10:34 AM
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Any money spent prior to death has absolutely nothing to do with the brother. It was an arrangement specifically made between the parties involved. Any money spent prior to death does not need to be accounted for. The responses here have become unnecessarily complicated.
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# 20
Clifford_Pope
Old 24-01-2011, 3:19 PM
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The OP said:

"My Grandfather gave me 20k to “look after” for him "

That's either a loan or a trust. Either way it's an asset belonging to the GF which the executors have a duty to trace and account for.
If the GF had put the money in a savings account but the institution was now proving cagey about releasing details or returning all the money, wouldn't the executors be right to chase it?

In principle the brother is absolutely right, but it's not very brotherly or trusting. But even so, it can't be difficult to compile a list that accounts for the expenditure.
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