Trustee wanting detailed accounting of finances pre-death

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Thecaretaker
Posts: 1
Joined: Wed Feb 05, 2020 12:25 pm

Trustee wanting detailed accounting of finances pre-death

Post by Thecaretaker »

I always enjoy passively reading this board. Here’s the scenario.

The family had 5 children. Our dad died June 2013 and that left our mom with a savings account of around $110,000 plus Social Security of $1000 a month plus her small pension of around $1000 a month. The main asset was 50 acres of land which they bought in the ‘60s. No debts and she loved living in the house they built.

Our mother was diagnosed with a progressive neuromotor disorder 5 years ago and it affected first her speech and then her ability to walk and write. Her mind always was sharp.

I moved into her house around 2014 and we had occasional paid help during the day. Two sisters would come in at times to help. I paid for about half of her expenses during these years and I made sure that the expenses of others were paid. I put money into a joint bank account between our mom and me. I was not concerned that I get immediate reimbursement for the expenses that I personally covered and I did not accept any checks offered during the early years. The savings account was not touched until 2018. In 2018, she tried an assisted living placement for 3 months, then she returned to her home, and I again left my home and husband to care for her.

After returning to her house, our mom was more insistent that I begin to accept money from her. She might have been “settling her accounts” before her death. For future additional expenses, we set up paperwork by May where my financial advances (at this point $7,500/month) would be repaid when the property was sold.

Our mom died peacefully at home with hospice in Sep 2019. Her Trust (which owned the 50 acres) had 3 Daughters as co-Trustees. I did not accept the appointment and I prepared to return to my “civilian” life. With the last of our joint resources, I paid for the funeral and bills for 12 months of property insurance and 6 months of property tax bills which were received just after her death. She had no cash or debts at death (except perhaps for my remaining unreimbursed expenditures which I did not claim).

Now my sister is demanding actual checks, bank records, and dates/amounts paid to helpers for the time while I was with her. Over the 60 months, our mother's total available finances would have been just $260,000 (less than $3,500 per month). Unless my sister can support the argument that I “took advantage” of my care position is she entitled to this accounting. I know Medicaid can reach back to reclaim money, but does a Trustee have this authority just because she asks?

These demands are straining my relationship with her. I do not feel that she needs to verify all the actions that were taken while our mom was alive. Legally, is she entitled?

Thanks.
rooms222
Posts: 519
Joined: Fri Feb 22, 2013 2:12 pm

Re: Trustee wanting detailed accounting of finances pre-death

Post by rooms222 »

This question is state specific. That kind of information would more likely be about a claim of financial exploitation or elder abuse. https://www.milvidlaw.com/estate-planni ... der-abuse/

This seems like some of the drama in settling an estate. By not taking the appointment, you have given more power to someone to act out and mess around. You may need to seek legal advice and have someone on retainer, so you can direct such calls and demands to your attorney.
adamthesmythe
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Joined: Mon Sep 22, 2014 4:47 pm

Re: Trustee wanting detailed accounting of finances pre-death

Post by adamthesmythe »

Maybe you need an attorney. However before retaining one- do not communicate in any way concerning these finances, wait for some sort of formal request/ demand, then delay until you actually get an attorney.
PVW
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Joined: Mon Dec 29, 2014 11:01 am

Re: Trustee wanting detailed accounting of finances pre-death

Post by PVW »

Thecaretaker wrote: Wed Feb 05, 2020 1:50 pm Legally, is she entitled?
I have no idea, but it's possible she feels she's obligated to account for these recent expenditures. I wouldn't be too quick to assume she's questioning your integrity.
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Tamarind
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Re: Trustee wanting detailed accounting of finances pre-death

Post by Tamarind »

OP, I'm definitely not questioning your integrity. I've seen first hand from my parent and their siblings how easy it is to entangle finances with an ailing parent. My grandmother died with liquid assets in her name even as her PoA child was asking the other siblings to send checks to reimburse them for out of pocket expenses. The PoA had emotional reasons for wanting their mother to not become "indigent" even though it might have made more financial sense to exhaust her assets first.

However, if I were your sibling and an executor of the estate or trustee and you were claiming that you were a creditor of the estate and entitled to be paid back for amounts previously spent, and I did not have clear direction in the will or trust documents what to do, I might ask for documentation too. If I took the trustee position seriously, I would consider it my duty to document all the expenditures I made from the trust, their purpose, and supporting information to justify them.

Obviously this can be done in a nice way or in a suspicious and difficult way, and the personality of the siblings might be an obstacle. If the paperwork you refer to above to have completed in May was a properly executed personal loan, that would probably do the trick for me, a non-expert. If it was less official than that, or if the terms of the loan somehow conflict with the trust documents and other directives..... That's a tougher situation.
Luckywon
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Joined: Tue Mar 28, 2017 10:33 am

Re: Trustee wanting detailed accounting of finances pre-death

Post by Luckywon »

Does she have an attorney representing her as trustee? If she does, ask her for a letter with these demands from her attorney, so that you can review it and possibly retain your own attorney. If she does not, tell her with respect to those demands she should get one, and you will respond to the attorney. Maybe that will put an end to the matter.
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celia
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Location: SoCal

Re: Trustee wanting detailed accounting of finances pre-death

Post by celia »

None of us have seen the trust or even know who the trustee was while she was alive. But if there was a trustee other than the grantor (your mom), that trustee should have been keeping these records all along. How else, can the current trustees figure out how much any of her kids (or you) were contributing to her support so you all can be reimbursed ? (Your contributions were actually a debt unless you were gifting it all to her.)

I would start by understanding the trust and writing down questions about things I don't understand. Take a copy of the trust and your questions to an estate planning attorney in your mom's state of residence. At that time, you can also clarify the role of the current trustees.
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8foot7
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Re: Trustee wanting detailed accounting of finances pre-death

Post by 8foot7 »

I misread.

It is probably reasonable since you are seeking repayment of money for the trustee to require that you document the expenses. Whether she is entitled to a complete accounting of all expenses, not just the ones you are claiming pursuant your agreement with your mother, is an open question. But the trustee likely has an obligation to document expenses and since it sounds like the amount at stake is not small, you should be prepared to document your advances and perhaps even what was done with them.
NotWhoYouThink
Posts: 3175
Joined: Fri Dec 26, 2014 4:19 pm

Re: Trustee wanting detailed accounting of finances pre-death

Post by NotWhoYouThink »

Thecaretaker wrote: Wed Feb 05, 2020 1:50 pm

After returning to her house, our mom was more insistent that I begin to accept money from her. She might have been “settling her accounts” before her death. For future additional expenses, we set up paperwork by May where my financial advances (at this point $7,500/month) would be repaid when the property was sold.

Our mom died peacefully at home with hospice in Sep 2019. Her Trust (which owned the 50 acres) had 3 Daughters as co-Trustees. I did not accept the appointment and I prepared to return to my “civilian” life. With the last of our joint resources, I paid for the funeral and bills for 12 months of property insurance and 6 months of property tax bills which were received just after her death. She had no cash or debts at death (except perhaps for my remaining unreimbursed expenditures which I did not claim).

Now my sister is demanding actual checks, bank records, and dates/amounts paid to helpers for the time while I was with her. Over the 60 months, our mother's total available finances would have been just $260,000 (less than $3,500 per month). Unless my sister can support the argument that I “took advantage” of my care position is she entitled to this accounting. I know Medicaid can reach back to reclaim money, but does a Trustee have this authority just because she asks?

These demands are straining my relationship with her. I do not feel that she needs to verify all the actions that were taken while our mom was alive. Legally, is she entitled?

Thanks.
Do I understand correctly that even though you kept track of your financial contributions you are not asking to be reimbursed from the estate?

How much do you think your sister understands about your mother's financial status over the last several years? If she knows virtually nothing, maybe a simple summary similar to what you put in your post will put her mind at ease. Money is an uncomfortable topic for many, and although this is an emotional time for your family the more dispassionate you can be in helping the rest of your family understand the situation the better.

You say that you have been the one to handle your Mother's finances over the last year or so, and then have backed out from being a trustee. I think it is reasonable for her to ask for some insight, the level of detail may be negotiable.
J295
Posts: 2628
Joined: Sun Jan 01, 2012 11:40 pm

Re: Trustee wanting detailed accounting of finances pre-death

Post by J295 »

This is a legal question and you cannot expect a reasonably reliable answer here. A good lawyer would know the impact of state law and review the actual trust agreement and pertinent facts, and then give you a response.
Nowizard
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Joined: Tue Oct 23, 2007 5:33 pm

Re: Trustee wanting detailed accounting of finances pre-death

Post by Nowizard »

You know the sayings: 1. To determine a person's character, share an inheritance; 2. Trust but verify

As one who has shared an inheritance with a sister who was the other beneficiary, we both asked and received questions. She was more involved than I in care and incurred expenses. She kept records but never presented them directly. As the lead in settling the estate, I kept detailed books and included a line for any expenses she wished to submit. She did so, I never questioned them, made an adjustment and never looked at the records she had kept but simply put them with other accountings relative to settlement. If you have had a trusting relationship with your sister, continue it now. If there is reason to escalate it, do so. That's it. Be assured, however, that involving attorneys will ultimately have a cost that reduces the overall estate, something that may be worthwhile or not. Settling an estate is both practical and emotional. Doing so for us involved sorting through items that had substantial and no monetary value. Those that had emotional value or memories attached were a valuable portion of settling the estate and enhanced the relationship between ourselves and the deceased. It was the last thing we could do for our mother, earlier our father, and is remembered with both sadness and smiles. Though there will always be some tedium, please recall that there are emotional factors involved that have little or nothing to do with the practical matters. A discussion with your sister can hopefully resolve the issues as they arise.

Tim
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