The Expert Podcast

If you have a recent death in your family and there's a probate case or a will or even items for that deceased person that have to be distributed, be very aware of what's happening with that. Even if there's a relative that's in charge of that, one of the most common types of cases that we get inquiries for at our agency has to do with probate fraud or executor fraud, where somebody's died and that person has certain assets — vehicles, bank accounts, personal belongings, cash, and even real estate — and those have to be distributed properly to the surviving relatives. Maybe children, maybe grandchildren, maybe spouses, aunts, uncles, what have you.

There's usually a person either formally assigned to distribute those, called an executor of the estate. Sometimes somebody informally will just take it upon themselves to do it. Make sure that as you're getting into this you understand this is a legal process. We're not attorneys, we're not giving you legal advice. You might want to get advice from a qualified probate attorney because distributing assets many times is done incorrectly and sometimes it's not intentional.

You might think, well, you know, my grandmother died and this box of jewelry was in the house and I'm just going to give it out to the relatives. Well, technically assets are supposed to be distributed in a certain way, even bank accounts. And what can happen is, here's an article from one of these “ask for help” columns: you know, the executor liquidates everything.

My uncle is the executor of my grandparents' wills. My grandmother died and everything went to my grandfather. He passed away, and my uncle and his wife took it upon themselves to decide what to do with everything, and they didn't do what everybody wanted to do. According to this writer, the grandparents wanted everything to be divided evenly, but the uncle sold, donated, or dumped everything before the family knew anything. People were upset, which, you know, rightfully so.

We've seen it done also intentionally. We had a case we worked on a couple of months ago where a person died. He was not married at the time; his wife had predeceased him. He had a home, two vehicles, some cash in the bank, and many personal belongings. A child, a son of this person, took it upon themselves to distribute things mostly to himself, gave a few things to a couple of other relatives, but there were debts on that estate. The person had some credit card debts, the person had a business loan, and those creditors came looking for the assets.

Because they were distributed improperly, there were a lot of penalties and legal fees that had to be incurred. If the son who distributed these assets had simply just written a check for the credit card bill, which was only about $3,000, and the business loan was about $8,000, then he could have distributed the rest in a more appropriate manner. They wouldn't have incurred $220,000 in fines and legal fees that everybody had to pay back who received these assets.

There's also been cases — we had a case in Pennsylvania where we did some research of assets that happened to be in Florida. But the person died in Pennsylvania, and there was a farm in Pennsylvania that had a lot of equipment. One of the children lived in the town where this farm was and sold the equipment, gave it away, processed it himself. There were other relatives, other children that lived in other states that weren't right on the spot when this was happening and basically were shorted out of what was rightfully theirs.

One of them, there was a car in a barn that they were supposed to get, and the relative who lived close by to this farm just basically sold the car out of the barn to somebody on eBay or Craigslist. The relative that lived out of state that was supposed to get this car basically didn't get anything.

So if you're involved with a probate case, get good legal advice. But more importantly, get a good asset search. Find out what assets are owned by the person who's deceased — bank accounts, vehicles, real estate, corporate assets. Get a good itemization of everything so you know where it goes, where it went.

Check for assets that may have already been transferred. There's a legal term called fraudulent conveyance, where if somebody's giving away assets or selling when they're not supposed to, that's not legal, it's not allowed. You want to get a good asset search hopefully right before the person died so you know what they had before they died and then what they have after they died, to see if there's any differences, if there's any diminishment of assets, any decrease of assets.

It's extremely common when there's a person who's deceased for their assets to be distributed in ways that somebody has an objection to. And it may be right or wrong, but somebody objects to it and that has to be accounted for in the distribution. Maybe there's a will that says, no, here's where it goes. Maybe there was no will, they died intestate, and then it has to go through the probate court.

There's also the matter of filling out a tax return when a person's deceased. There has to be a last tax return done for that person. So be aware of the legalities of a probate distribution, but more importantly, identifying the assets so that if you're all involved with that type of a case, you know what the assets were and you know where they went so that there's no surprises and somebody's not doing something intentionally or even accidentally that is diluting those assets in ways that everybody didn't agree on and the person who died wouldn't have approved of.