Handling A Challenging Heir or Executor
This is Brad from Probate Resource. I’m back today with my friend April Jackson, who is a probate and estate attorney in Nashville, Tennessee. We’re discussing various topics related to probate in Tennessee. If you want to check out some of our videos, please visit probate resource.com/tennessee.
- When Your Executor Isn’t Cooperating
- When to Remove an Executor
- Finding a Missing Heir
- Finding Common Ground
- Executor vs. Partition
- Cost of Estate Disputes
- The High Price of Disagreement
Today, we are addressing a sensitive topic: challenges that can arise with executors and heirs. April, you have worked with many families over the years. Do you have any tips for families who are facing difficulties in these situations, and how can they navigate these hurdles?
When Your Executor Isn’t Cooperating
If you find yourself dealing with a challenging executor or personal representative, it’s crucial to rely on your attorney for support. Make sure to document any communications you have with the executor. This includes keeping emails and following up any phone calls with a written summary to establish a clear paper trail of your efforts to resolve any issues. Additionally, it’s important to involve your attorney throughout this process.
The attorney typically represents the estate, not the executor in their personal capacity. Their role is to help you, as an heir, by encouraging the executor to fulfill their responsibilities and move the estate towards closure. If you’re still having difficulties with the executor, and if you’ve previously signed what are called waivers and consents, you can file to revoke those waivers. While it’s often beneficial to waive obligations such as inventory, accountings, and a bond (to save the estate money), if you believe the executor is not performing their duties properly or in a timely manner, you can reconsider that waiver. You can go back to the court and request an accounting to understand what has been happening with the estate.
When to Remove an Executor
The final step is to request the court to remove the executor, but this should be considered a last resort. If the executor has already received checks from the bank but hasn’t deposited them into the estate account, that will create additional challenges. Ideally, all the funds should already be in the bank account so you can simply transfer control, but that isn’t always the case. It’s important to work closely with your attorney in these situations, as they represent you as an heir to the estate.
Difficult Heir
If you are the executor or personal representative and are having difficulty obtaining information from the heirs and beneficiaries, keep in mind that your role is limited to managing the probate estate. For any assets with beneficiary designations, such as retirement accounts or life insurance policies, you should inform the beneficiaries that they need to handle those matters independently.
If beneficiaries are not communicating with you, remember that your primary responsibility is to gather the assets, settle any debts or claims, and distribute the remaining assets. There are protocols for distributing assets. For instance, if a beneficiary has cashed a distribution check but hasn’t signed a receipt confirming they received the funds, you can file a motion with the court in Tennessee. In your motion, include a copy of the cashed check and explain that you have requested a receipt signature for three months without success. The court will recognize that the beneficiary has received their money since they endorsed the check.
Finding a Missing Heir
If you’re trying to locate someone and have no idea where they are or how to reach them, you have some options. One possibility is to announce your search through public notice, like in a newspaper, to get the word out. If that doesn’t yield any results, you can request to deposit their share of funds with the clerk’s office.
For example, let’s say we’re trying to find our brother, who we can’t locate, and no one seems to know where he is. Despite exhausting all our options, we decide to ask that his one-third share be deposited with the clerk’s office. This way, if he shows up later, he can retrieve the funds from there. Eventually, if the funds remain unclaimed, the clerk will send them to unclaimed property. In this situation, it’s important to note that it’s not your responsibility or your attorney’s responsibility. If he wants the money, he just needs to reach out to the clerk.
Brad:
Finding Common Ground
Right now, in cases where an executor hasn’t been appointed yet, such as in situations of intestacy (when there is no will), families often struggle with who should take charge. This is a common scenario. Often, one family member believes they should have control, especially if there is property involved. For example, if there’s a house with a market value of $200,000, but it needs $100,000 worth of repairs and is realistically only worth $100,000, conflicts can arise.
Just last week, I encountered a situation where one heir insisted that the house was worth $400,000 and would not agree to anything unless it was sold for that amount. Meanwhile, three other family members pointed out that the house was essentially a wreck and that multiple offers between $100,000 and $105,000 had already been made. If you’re faced with a situation like this – dealing with a difficult sibling who has an unrealistic view of property value – it’s essential to approach the issue calmly.
First, gather all relevant information, including property appraisals and repair estimates, to present a factual basis for discussion. Encourage open communication among family members and aim to reach a mutually agreeable solution, perhaps by exploring options like mediation if discussions become too heated.
Executor vs. Partition
If you have a will that designates an executor to manage the property, then that executor has the authority to sell the property and distribute the proceeds accordingly. However, if there is no such designation, the judge will simply acknowledge the will and state that the property is now owned by the beneficiaries named in the will. In the absence of an agreement among the heirs, you may need to file a petition for partitioning the property. This involves a lawsuit to sell the property and divide the proceeds. This can lead to additional expenses.
For instance, if we consider a house valued at half a million dollars but realistically worth only a hundred thousand, if we must go through this process, we could incur around a hundred thousand dollars in attorney’s fees, leaving nothing for anyone else. Ultimately, if a court case is necessary, those costs will come from somewhere, and it’s preferable to have them covered by the estate while also minimizing these expenditures.
The True Cost of Estate Disputes
Yes, it often seems like attorneys are the ones who benefit the most from these situations. Most attorneys, however, will strive to help you reach a settlement whenever possible. Going to litigation is costly, and we also need to consider the impacts on your mental health and the time involved. There comes a point when you have to ask yourself if this is even worth it. What will you ultimately gain from it? It’s not just about trying to create a win-win situation but about finding a resolution that works for everyone involved.
Brad:
I’ve shared this story before, but it’s worth revisiting. Last year, a brother and sister reached out to us regarding a family property. They had been fighting over it in probate court for years. The sister petitioned to have her brother removed as the administrator, while the brother tried to have the sister removed as well. Their conflict escalated when the brother secured a good offer on the property, which I advised them to accept. However, the sister insisted that the property was worth more money and claimed she had a friend who could help rehabilitate the house for resale. Keep in mind, the sister lived three states away; it seemed unrealistic for her to manage contractors and oversee the project from that distance. Moreover, she planned to split any profits with her local friend. I tried to explain to them how the math simply didn’t add up, but they continued to argue for about four or five years in probate court.
The High Price of Disagreement
Eventually, they amassed a staggering $60,000 in attorney fees while battling each other. Their attorneys dropped out and they had to find new ones, who often only had their payday in mind. After years of fighting, the probate judge finally intervened. In a nutshell, the judge decided enough was enough and decreed that the property would be deeded to both of them as tenants in common, meaning they would each own 50% of it.
This case is now out of probate court, and the probate case is closed. It’s now a civil matter, so you need to resolve it in superior court. The frustrating part is that if they had accepted the offer they received two or three years ago, they would have ended up with more money than they do now. Instead, they’ve spent all this money and faced additional costs related to maintaining the property, including power bills, mortgage payments, property taxes, and attorney’s fees.
What has all of this been for? They were just fighting each other, bickering over who would have the upper hand, which was sad to witness. We eventually chose not to buy the house, and the sister ended up having him evicted. The brother was living in the house and taking care of it while she lived three states away. He and his wife moved in and quit their jobs to take care of their mom during her final year of illness. After she passed, he continued to maintain the house. He had previously owned another home and wasn’t simply relying on his mother. He had made personal sacrifices for her care, and in the end, he received nothing.
If you’re going through a similar situation, remember to be the bigger person and try to swallow your pride. Sometimes you may need to make compromises to get things resolved, even if it feels uncomfortable. Doing so can ultimately save you money in the long run.
Those are some helpful tips for dealing with challenging executors and heirs.