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Thursday, June 22, 2017

The Law Show: changing and removing executors - now online for listening

The latest episode (June 22, 2017) of The Law Show is now available online for you to listen. This week we talked about changing your executor when you change your mind.  We also talked quite a bit about how someone other than you - such as a beneficiary - applies to the court after your death to remove your executor. Lots of great info! Click here to go to and scroll down to the episode you want. The newest one today is track 12.

Sorry Bro, You're Out: How to Fire a Family Member Without Destroying the Family - or the Business

When we plan for passing the family business down to the next generation, we often talk about "seeing how things work out" and "training a family member to take over". But what if the family member in question is not doing a great job, and is just not working out well at all. Now you're in a tough place. How do you fire someone in your own family? Can it be done without causing World War 3?

I found an article at that has some solid advice for business owners who are the awkward position of having to fire someone that he'll see around the Thanksgiving table. Click here to learn five tips you'll need if you're in that situation.

Thursday, June 15, 2017

Can a grandchild request an advance on inheritance from a living grandparent's executor or POA?

Here's a really interesting question from a reader. It deals with asking for an advance on an inheritance from an older relative, and who might be allowed to make that decision. Read on for the question and my comments.

"A grandchild is looking for a advance on the inheritance from their living (90 yr old) grandparent. Is this legal? I believe grandma's executor will be asked. And he may be the POA as well. Again is this legal?"

You ask a couple of times whether "this" is legal but you are not very specific about what "this" is. On the face of it, you seem to be asking whether it is legal for someone to ask their grandparent for an advance on their inheritance.

A grandchild is not normally mentioned directly in a will, though of course it happens sometimes. Does this grandchild know for sure that he or she is actually named in the will? I'm a bit uncomfortable that everyone is so familiar with the contents of Grandma's will while she is still alive, but I realize some people do tell their families what their wills say.

Of course it's legal for a person to ask for an advance, but the person must be careful not to cross the line into bullying. Making Grandma feel for any reason that she cannot refuse the request is elder financial abuse. That is bound to result in disharmony and disputes within the family. If Grandma is of sound mind, then by all means someone can ask her for financial assistance.

The other possibility is that you're asking whether it is legal for someone to agree to the request. It seems that the grandchild is planning to ask someone other than Grandma herself, which is interesting. Does she not have the mental capacity to deal with the request?

You  mentioned that the executor will be asked to make an advance. That would be completely illegal and would, in fact, be theft. The executor has absolutely no legal authority to touch Grandma's money while Grandma is alive. Read the will. Read ANY will. It says, "when I die, this person will be my executor". It does not make them the executor while she's alive.

This is a bit of a pet peeve for me. How many times have I told someone who will be an executor in the future that they cannot act as the executor now, only to have them snap at me that they have the right to make financial decisions? No, they don't. It is illegal to take your parents' money without legal authority and a will gives you no authority whatsoever while the person is still alive. Hopefully I've made my point. The executor may NOT advance anything to the grandchild, and if he or she does, I hope the rest of the family steps in and puts a stop to it.

You also mention the Power of Attorney (POA), who is in a very different position from a would-be executor. The person acting under a POA does have legal access to Grandma's money, as long as the POA document has been properly brought into effect. Most POA documents require a doctor to provide a statement that the person has lost capacity before it can be used. I'm assuming that the contingency has been properly met in this case.

So, we've established that the POA can access Grandma's funds, but can  he or she give an advance on an inheritance? The first and foremost guideline for anyone acting under a POA is that he or she must always act in the best interest of the person he or she represents, in this case, Grandma. How does it benefit Grandma to advance funds to the grandchild? Is it the best thing for Grandma, or is it really only good for the grandchild? The POA must put Grandma's best interest ahead of anyone else's, even if the grandchild is a child or sibling of the person acting under the POA. That's a tough standard to meet.

I think in a case like this, the person acting under the POA would be justified in looking at the bigger picture to take into consideration how Grandma interacted with her grandchildren financially before she lost capacity. Has she made advances to other grandchildren? If so, that might indicate that she would choose, if she could, to make an advance now. Has this particular grandchild asked Grandma for money in the past? If so, it could indicate that the grandchild is taking unfair advantage of Grandma, and that she would refuse if she could. The family context is very important.

Of utmost importance is the question of whether Grandma can actually afford to part with the money for an advance. Her own care and accommodation must the first priority for the person acting under the POA document. If her financial picture is modest, it is really not fair to ask her to compromise her own future care to help a grandchild.

As an aside, I suggest that if the advance is made, it should be documented in writing to avoid any future issues.

I realize that you probably would have really liked to get a "yes or no" answer, but it's never that simple in estate law, I'm afraid.

The Law Show: What happens if you die without a will? Now online

The latest episode (June 15, 2017) of The Law Show is now online and available for listening. This week we talked about what happens if you pass away without a valid will in place. Where does your estate go if you're not married? Who is supposed to step up and ask for authority as administrator? Why is being an administrator harder than being an executor? What portion does the government take? And lots more. Click here to go to the webpage and scroll down to the episode you want to hear. If you're not sure which show to listen to, check our listing on the right hand side of this blog.

An old war medal and its rightful owner

Here's a nice story. A researcher at a company that specializes in finding missing heirs under wills happened to hear on the radio that an old war medal had been found. She was able to track down the name of the person to whom it had been awarded, and get the medal back to his surviving family.

When a beneficiary of an estate cannot be located, his or her share of the estate is often paid into the Office of the Public Trustee where it will remain until the beneficiary is either found or declared dead. In my experience, though, most executors don't put a lot of effort into searching for a missing beneficiary. This is partly because they don't have a lot of information to go on, partly because they simply don't have the time, and partly because the other beneficiaries will get upset if a great deal of money is spent on the search.

It seems to me that hiring a company to search for a beneficiary is a better idea than simply paying it to the Public Trustee for safekeeping.

Click here to see the article and an accompanying video.

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