WIDOW ORDERED TO RETURN $5.4 MILLION TO ESTATE OF LATE HUSBAND AFTER STEPSON SUED HER – PROBATE COURT SURCHARGES WIDOW $800,000
This recent inheritance lawsuit — which has been going on for over 10 years ! —- issued a few days ago by a Michigan appeals court , involved
1) millions of dollars of an estate
2) MIS-use of estate funds
3) payments on a house in Martha’s Vineyard
4) removal of a widow as PERSONAL REPRESENTATIVE of the estate
5) surcharge of the widow as personal representative and
6) which pitted the widow or surviving spouse against her late husband’s children from a prior relationship. Hmmmmm……… millions of $$, a dead parent, a wealthy estate, and stepchildren and a stepmother…..are we surprised everyone lawyered up for probate litigation ?
If you have stepchildren, or a stepmother, you should read this appeals court opinion of what the probate court did — and what went on in the probate & estate administration.
MILLIONS OF $$ AT STAKE
Everyone knows that stepchildren and step parents don’t always get along. When the one with the money dies, that’s usually when the probate litigation begins. Although, increasingly in Florida probate courts, such as in Palm Beach, and Fort Lauderdale, it seems that children, stepchildren, heirs, next of kin, and second and third spouses are involved in guardianship litigation before someone dies.
- Judy is the widow of her late husband Larry.
- Larry was worth millions and had two children from another relationship.
- Larry died in 2001
- Larry’s daughter did not participate in the probate litigation — she accepted $100,000 as her interest in the estate
WIDOW IN CONTROL OF THE MULTI MILLION DOLLAR ESTATE — discloses only $965,164
- Judy was put in control of Larry’s estate and she probated his estate — limitedly
- Judy was appointed personal representative of the estate— what is an estate executor— for an “informal probate” of the estate in November of 2001
- Judy filed an estate or probate inventory on May 28, 2003
- Judy listed, on the estate inventory, estate assets of $965,164
ESTATE CLOSED IN 2003 — REOPENED TO FIX PROBATE ASSETS ON ESTATE INVENTORY
- •· Judy closed the estate & probate administration in June 2003,
- •· Judy wanted to reopen the estate in December 2003 to fix the probate inventory — the estate assets on the estate inventory needed to be revised
STEPSON GETS INVOLVED IN ESTATE RE-OPENING: QUESTIONS WIDOW’S HANDLING OF PROBATE
Disputes arose !
Q: Did Judy use estate assets to pay personal expenses ? If so, that’s a breach of her fiduciary duty as estate personal representative. A conflict of interest and an act of self-dealing are strictly prohibited in the probate world.
What about the accounting and inventories of estate property?
Q: Are the estate accountings and probate inventories accurate ?
WIDOW REMOVED AS PERSONAL REPRESENTATIVE OF ESTATE — stepson takes over probate administration
- Judy was removed as the personal representative
- Larry’s son, Judy stepson, was appointed as the second successor personal representative of the estate on March 9, 2006.
13 DAY TRIAL IN PROBATE COURT ! …………….. bad news for widow
The probate court, after a 13 day trial, concluded:
- Judy acted willfully, maliciously and with the intent to defraud the other heirs of the Estate.
- The court disallowed $3,016,775 of Judy’s expenses
- the probate court found $17,965 in disbursements from the estate accounts were not properly disclosed on estate accountings
FORMER PERSONAL REPRESENTATIVE & WIDOW ORDERED TO REPAY $$$$$$$$$$ !
The probate court ordered Judy
- to repay money to the estate — $1,017,210 for mortgage payments made with estate funds on two property she owned
- repay $591,253 representing the value of estate business interests not liquidated by Judy when acting as personal representative of the estate,
- repay $558,825 in attorney fees incurred on behalf of the estate by the stepson as the second successor personal representative,
- repay $230,000 in excess capital gains taxes incurred due to miscalculation following a sale of the estate’s business
- pay $887,686 to the probate estate as a surcharge
Judy appealed. The appeals court affirmed in part and reversed in part.