My father is elderly and lives in Kansas and has a large revocable trust that he and my mother (now deceased) created in 2003. My older brother is the co-trustee and helps my dad with bills, etc. My brother took out a $50,000 loan in secret from my father a number of years ago. He is a co-trustee of my fatherâs estate.
My father told me recently that my brother never paid it back and that he told my father that he didnât feel he needed to pay it back. What is the best way to address this so that this doesnât happen again? Can anything be done about it? It appears there is no documentation, but my brother is furious that I found out about it.
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My brother is also forging checks that he writes from my fatherâs check book. It is unknown if he is buying anything for himself or if he is forging only checks to pay bills. Is it unreasonable to request that he provide a periodic accounting to the two other beneficiaries (every three to six months) and what should a periodic accounting report include?
When my father passes, a bank is designated in the trust to be the entity that will be distributing the estate, not my brother.
If your brother is a co-trustee of your fatherâs estate, he should either be removed or he should not be allowed make any decisions without his siblingâs agreement.
Without a notarized loan agreement, itâs extremely difficult to prove that this money is a loan rather than a gift and, even then, it depends on your brotherâs willingness and ability to pay it back. There is a simple solution, however. Talk to your father and his estate attorney about reducing your brotherâs inheritance by $50,000. Assuming thereâs enough money in your fatherâs estate and/or the value of your fatherâs house, you can force your brother to account for the loan after your father dies. By all means, tell your brother after discussing this with your father.
Your brother should not have access to your fatherâs bank account or check book. He has proven himself to be unreliable at best and untrustworthy at worst. All bills should be paid by direct debit or automatic transfer. Cancel your fatherâs check book, talk to his bank about the issue with your brother so the employees are aware that there has been an issue with erroneous checks. Talk to your father about becoming power of attorney and help him manage his accounts online. It will empower him and give him more control over his own finances.
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If thereâs a risk that your father will be pressured by your brother to allow him to access these online accounts, ask your father if he would mind you keeping the passwords safe. At all points in this process, itâs important to involve your father, his estate attorney and his bank, so they are all kept in the loop and your father feels empowered. The worst thing about elder financial abuse or coercion is not only the breach of trust, but the damage to an elderly relativeâs self-confidence. With your help, our father should feel like he is gaining control of his finances and life again.
So everyone is kept in the loop, I agree that a periodic accounting is a good idea, as long as that has the blessing of your father. Transparency will help prevent any other mismanagement of your fatherâs finances, and it will help restore trust in the familyâs ability to help your father meet his financial obligations. An independent fiduciary to manage your fatherâs estate after he passes is a good idea and a trust will help in that process. Every step of the way, put your father first. Ask how he feels about these changes and keep him informed of all developments.
You can be of service to him as a daughter who sees him and respects his independence, as well as a de facto manager of his financial affairs.
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