When Ronald Black was diagnosed with terminal cancer, he took the appropriate and responsible steps towards getting his affairs in order. The family printing business was put up for sale and Ronald started taking care of his personal business. He approached his attorney about creating an estate plan that would ensure the appropriate distribution of assets to his wife and their adult children. It had been many years since he had last written a will and it was sorely outdated. They worked quickly to put together a plan with all of the necessary provisions. Ronald enlisted a trusted business advisor as the executor and signed the final documents just three weeks prior to his death.
Although they had been married for twenty three years, Ronald’s untimely death left Rebecca a young widow with a lot of responsibility. The decision to sell the family business – one they had grown and nurtured with hopes of one day leaving to their children – had been made hastily when it became apparent that none of their four children were prepared or able to take over the daily responsibilities on such short notice. While Rebecca was provided with adequate financial resources, her status as a non-U.S. citizen spouse exposed her to some unnecessary tax risks and obligations. In addition to helping sort out their assets and liabilities, getting her citizenship status resolved prior to filing the estate tax return became a critical task.
Ronald’s attorney initiated the immigration proceedings to resolve Rebecca’s citizenship status while the executor began sorting out the affairs of the estate. As weeks turned into months, Rebecca’s communications with the executor become less and less frequent and she began to notice gaps in his handling of the estate. First the distributions of Ronald’s specific bequests to the four adult children of their blended marriage were delayed. Then the executor asked the children to sign tax documents acknowledging the receipt of funds they had yet to receive. Next the executor stopped accepting her calls and responded to left messages only via letter.
“When you talk to your friends and tell them about the lack of communications and they say ‘he’s taken a lot, he’s scammed you,’ that is when I had my first suspicions something inappropriate was happening with the estate,” explained Mrs. Black. “The funny part was that my friends were talking about stars that had turned over their wealth to a trusted advisor and didn’t pay attention to it only to have it disappear.”
More than a year had passed since Ronald’s death and the time to file the estate tax return had passed. Although the executor told Rebecca that the return had been filed, he failed to provide her with a copy and she was unable to verify with the IRS that one had been received. It was Rebecca’s financial advisor who at this point encouraged her to seek assistance from an attorney who ultimately referred her to estate and trust dispute resolution specialists, Morgan & DiSalvo.
“A lot of disputes occur because of a lack of communication; clients just don’t know what is going on,” explained attorney Richard Morgan, managing shareholder of Morgan & DiSalvo. “Usually we can resolve these issues by improving communication between the parties and making sure that the client knows that everything is ok.”
Unfortunately, Morgan’s investigation of this case found the problems to be much deeper than just a communications gap.
“This was a relatively large estate with a big estate tax return. We wanted to make sure that the appropriate assets were transferred into her name, that she was being treated properly and that the estate administration was being handled properly,” continued Morgan. “Our first step was to figure out what was going on, so when our requests for a copy of the estate tax return were met with a series of stalling tactics, we engaged an estate and trust litigator as co-counsel to help enforce our information and document requests with the power of the courts. We also requested that the court remove him as the executor,” continued Morgan.
After being advised of the impending filing of the complaint, the executor quickly sent Morgan a copy of the estate tax return. This is when the true depth of the problems began to be revealed.
“I just assumed that because he had been an advisor to their business that he was a legitimate choice for executor – perhaps incompetent, but not a thief. When I finally saw the estate tax return, I saw how badly it had been handled. We had discovery and saw the documents and how many suspect things had been done. It kept getting deeper and deeper. It wasn’t until the very end that we were able to determine that it had gone beyond incompetence to theft,” explained Morgan.
With persistence and attention to detail, the attorneys at Morgan & DiSalvo were able to mitigate the problems created by this executor and ultimately bring resolution to what had been an ugly scenario for Rebecca. Through the terms of her settlement agreement, they were able to put Rebecca on the path to being made whole again.
“It was very unnerving while we were going through it but at least with Richard I knew that I could call him and that I would get an answer or I would at least be advised of where we were in the process at that point,” explained Mrs. Black. “I don’t understand the whole process and all of the steps that he took but throughout the ordeal Richard was very committed and in the end, he did a great job.”
The issues faced by surviving spouses and family members can be avoided with proper estate planning, including fiduciary selections. While Ronald had the best intentions in the selection of his executor, ultimately Rebecca found that the executor was not adequately prepared to handle the complex details of this estate, nor was he honest enough for the job. It is unfortunate when disputes like this arise but important to know that the specialists at Morgan & DiSalvo are ready to help out.