Question: My sister and I are the heirs to my father’s estate, and she is the administrator. She sold some property a month ago and didn’t let me know. Shouldn’t I get half of the money? What happens if she spends it? Can she go to jail?
Loraine’s Answer: It is highly unlikely that your sister would be put in jail for the way she has handled the estate. However, if she has breached her fiduciary duty as the administrator, it is a serious issue. It’s possible that she could be removed from office and made to repay the estate for any damages her breach of duty might have caused to the estate or its interested parties (creditors and heirs).
That said, having sold estate property and not having made distributions to you using the sales proceeds may be exactly what she should be doing at this point.
If your father had no Will, her job as administrator is to gather the estate’s assets, determine debts and expenses that need to be paid, file his final income tax returns (and any needed from prior years, if he was not fully up to date on his filings), and then proceed with paying all known debts, taxes, and expenses. Only after all of that has happened is she supposed to make any distributions to heirs.
An administrator is not required to notify the heirs about sales of estate assets, although it’s generally recommended to try to keep family members posted on estate doings, just to help head off questions like yours. Distributions generally should not happen until after a lot of other estate administration tasks have been completed.
Ideally, even if she is not required to file any kind of inventory or reports with the probate court, your sister should be giving you at least an annual accounting showing estate income and expenses over the past 12 months. If she hasn’t been the administrator for at least 12 months yet, then you’re probably early to be expecting distributions and an accounting, although you can still ask her for information.
If it’s been more than 12 months since her appointment, ask for an accounting, if you haven’t been given one. If you don’t get one, hire your own attorney (if you haven’t already hired one). Have the attorney ask for an accounting. If you still don’t get one, have the attorney petition the probate court to force your sister to provide an accounting. If she then still does not provide the accounting, the probate court can remove her as administrator and appoint someone else. If it appears that anything she did or failed to do was a breach of her duty and damaged the estate, then the court can also hold her personally liable for the financial damages and make her repay the estate.
Key Estate Planning Takeaways: An administrator is not required to notify the heirs about sales of estate assets, although it’s generally recommended to keep family members informed on estate proceedings so they don’t wonder what’s going on and fill in the blanks with suspicion. Distributions from an estate generally should not happen until after a lot of other estate administration tasks have been completed, such as paying all known debts, taxes, and expenses.
This “Q&A with Loraine” blog series is inspired by answers from Morgan + DiSalvo Partner Loraine DiSalvo to actual user questions posted by individuals on www.avvo.com. This blog is a more in-depth response than can be given on their site under their character limits for answers. To view the original question and Loraine’s original response, click here.
