Son abusing his power as Attorney in fact.

Dear Len & Rosie,

After my father’s death, my mother gave my brother Stephen a durable power of attorney. Mom was never all that good with finances, and all of us agreed that it would be better for Stephen to take care of things in case anything bad happened to her.

Now I am wondering if my brother has exceeded his authority. He borrowed almost all of her life savings, over $32,000, to keep his home out of foreclosure.

Stephen signed a note for the money and agreed to pay interest at 10% per year. Mom has since reduced the interest to 7%. The problem is that she does not even know how much money Stephen pays each month, because he handles all of her finances. Mom hasn’t seen a checkbook or account statement since 1989.

I don’t know what I can do. Mom hasn’t got Alzheimer’s or anything and she seems happy with Stephen handling her money. I don’t know if I should sue or just leave it alone.

Edward

Dear Edward,

Stephen, as attorney-in-fact, has a legally imposed fiduciary duty to your mother. Unless the power of attorney your mother signed specifically authorizes him to self-deal, he cannot loan himself your mother’s money. Of course, if your mother told him that it was OK to borrow the money, than it is perfectly legal.

An interest rate of 10%, or even 7%, is downright generous these days. Your mother is making more interest from Stephen than if she kept her money in a certificate of deposit, assuming that Stephen is making the payments like he promised. The fact that he asked your mother to reduce the interest rate implies that he is making payments. If he’s lying about it, why would he bother renegotiating the loan?

You said that your mother seems happy with the way that Stephen is handling things and that she even agreed to lower the interest on the money he borrowed. This is a free country and a competent person can do anything she wants to, even if it is not in her best interests. Still, you should talk to your mother. Make her aware of what you think is going on, and have her ask Stephen to give her the account statements showing his payments and what he’s doing with her money.

Then step back to see what happens. Hopefully everything is above board. If it isn’t, or if Stephen refuses to show your mother the books, then she should fire him. As long as your mother is still in possession of her faculties, she can revoke the power of attorney at any time. Should your mother sue Stephen if he isn’t making payments? Most parents don’t want to see their children get in trouble, no matter what they do. But if your mother is willing to go the distance, she should consult with an attorney and consider suing her son for a breach of fiduciary duty.

Len & Rosie

How does one find out who the executor of a will is ?

Dear Len & Rosie,

My wife’s father passed away recently and she and her siblings are not on best terms. They would like to see if there was a will but don’t know how to locate the executor. Her father had told her it was someone outside the family. How does one find out who the executor of a will is, and for that matter how does the executor find out someone has died?

Marco

Dear Marco,

Our first inclination was to respond with simple “How would we know?” You’re looking for a needle in a hay stack. Your father-in-law’s will, assuming he made one, could be anywhere. He could have named anybody as executor, but it’s more likely than not that he named one of his children, or maybe one of his friends. Ask his friends, if you know who they are.

It is also possible that your friend named his lawyer as executor, but this is not very likely. Attorney fees in probate are fairly lucrative. A lawyer for a $500,000 estate earns $13,000 in statutory lawyer fees, the same as the executor. But if the lawyer also serves as executor, he or she gets paid only once. Double dipping is not allowed. Most attorneys decline to serve as executors for the simple economic reason that there’s nothing in it for them.

You also touched on the problem of an executor learning of the death. If the executor isn’t close to your father-in-law, how’s he or she going to know? Consider that your father-in-law’s executor may not actually know that he or she is named as executor in the will. Did your father-in-law even inform this person? For all we know, your father-in-law’s will may be gathering dust in an attorney’s filing cabinet.

You can check with your county’s local Bar Association. They can send an email to their trusts and estates section members to see if any of them have the will.  Otherwise, your family will have to undertake a scavenger hunt, sorting through belongings to see if there’s will lying around somewhere.

If there’s no will, then don’t worry so much. The estate will be divided equally among the children in probate. Any of the children may petition the court to seek appointment as Administrator of the estate. If everyone is cooperative, it’ll be easy.

Many people want to keep their estate plans confidential, but they should not be too secretive. Some of you may go so far as to make extra copies of your wills and trusts and pass them out to your children. If you don’t want to do that - if you wish to protect your privacy, then just give your children or other beneficiaries your attorney’s business card with a note telling them to contact the attorney upon your death or incapacity.

Len & Rosie