Estate/Independent Admin Final Accounting Error

[Dimsumkid]

I've been the Independent Administrator (like Executor) of an estate for the last 3 years, it's been a long and nasty battle. After settling all kinds of allegations of wrongdoing, I was cleared and got through final accounting. Now, I just made the payouts (last 2 yesterday), I come to find an accounting error for the payouts (everyone was overpaid about $500 each and I got shorted $3300). One of the distributees didn't collect theirs (in court) and it had to be deposited with the county treasurer. I've notified 2 of the other 3 parties to hold off on cashing the checks. Last payout went to a guardian of the person (a bank). I'm still waiting to hear back from the atty. I found a double payment error, which would cause an overdraft on the bank account. The error occurred when the atty reduced an expense by $3300 and added the same amount into the final distribution assets. I decided to redeposit my check ($3700) back into the estate account in case someone decides to cash their check and possibily cause an overdraft situation.

Has anyone ever had this happen to them and would I have to pay my attorney for the accounting error that he caused? I don't feel this is an error in my part, other than signing the final accounting statement, he did the funky math. This passed thru 4 seperate legal firms and the judge...and I'm the one who caught the error!

 

[Brat]

IMHO the attorney should stand behind his/her math. Call it to his/her attention and request that s/he resolve this.

 

[Dimsumkid]

He's still looking into it. I highlighted where the problems were. I guess he needs time to figure it out. I find it ironic that he charges by the hour, I get the privilege of finding the discrepancies and having to pay the bill!

 

[Martha]

The lawyer should not be charging for investigating and then fixing his error.

 

[Texas Proud]

The lawyer should not be charging for investigating and then fixing his error.

Agreed.... and I also think that he should be the one to front the money that was overpaid and go after the people..


I can tell you that on one trust that I was trustee (at mega)... one of the previous trustees overpaid... mega had to front the money and I had to spend time getting it back... it took me 1 1/2 years to get it all back, but I did... then again, it was not a final payout so I did have some leverage...

 

[Dimsumkid]

I appreciate your opinions about who's responsible for having to pay for this. I'm sure petitions to the court would need to be filed to recoup the money and to amend the final accounting. I'm sure it will be an embarassment to this firm than an error was made, this judge doesn't like mistakes, he likes to scold lawyers who piss him off. I'm hoping it won't be too hard to fix this issue, the final payouts were only $2100+ each. It looks to me that each party was overpaid about $600 each, but my share, including admin fee should've netted me around $3700.

 

[Brat]

My approach is to always give the person who made the error an opportunity to fix it without the involvement of others. It saves them face and, assuming you are correct, won't add to their financial liability. Let them know your expectations (don't bill me for your error) and provide a reasonable time for its resolution. Put this in writing. If it isn't resolved you can always petition the court.

FYI, I am not a lawyer but have worked with many.

 

[Dimsumkid]

My approach is to always give the person who made the error an opportunity to fix it without the involvement of others. It saves them face and, assuming you are correct, won't add to their financial liability. Let them know your expectations (don't bill me for your error) and provide a reasonable time for its resolution. Put this in writing. If it isn't resolved you can always petition the court.

I'm in this phase right now, it's been 1.5 days now and haven't had any contact from him (he wanted time to find the issue). You'd think it wouldn't take that long to isolate the problem since I pointed out specifically where the double reduction took place. Maybe he wants the weekend to try to figure it out. I think ego may play a big part in it, since I'm not an accountant, but I've found several previous errors in his financial accounting and he's made it a point to highlight how I always seem to find them. He insinuated that "how could there be an error" response when I first emailed him about this issue. I was shocked when he had to modify the final accounting for 1 item at 3 hours billing time.

I'm not sure this won't involve others, since I think it will require petitioning the court to correct the final accounting. One sibling was suing me for "stealing assets" from the estate (all that was left was the house). So this may create another opportunity to claim I did this to "steal" more of a distributed share for myself. Another family member is under guardianship and hasn't been told of the error as of yet. There's also the guardian ad litem that needs to be notified too. Since they would need to repay some $500-600, I'm sure there will be a lot of screaming about it.
The one sibling made us spend over $18k in legal bills just so he could get his fair share, which is now between $1500 - $2100. He has no sense of money, knows Chapter 11 rules well and will probably file again soon.

 

[haha]

I'm in this phase right now, it's been 1.5 days now and haven't had any contact from him (he wanted time to find the issue). You'd think it wouldn't take that long to isolate the problem since I pointed out specifically where the double reduction took place. Maybe he wants the weekend to try to figure it out. I think ego may play a big part in it, since I'm not an accountant, but I've found several previous errors in his financial accounting and he's made it a point to highlight how I always seem to find them. He insinuated that "how could there be an error" response when I first emailed him about this issue. I was shocked when he had to modify the final accounting for 1 item at 3 hours billing time.

I'm not sure this won't involve others, since I think it will require petitioning the court to correct the final accounting. One sibling was suing me for "stealing assets" from the estate (all that was left was the house). So this may create another opportunity to claim I did this to "steal" more of a distributed share for myself. Another family member is under guardianship and hasn't been told of the error as of yet. There's also the guardian ad litem that needs to be notified too. Since they would need to repay some $500-600, I'm sure there will be a lot of screaming about it.
The one sibling made us spend over $18k in legal bills just so he could get his fair share, which is now between $1500 - $2100. He has no sense of money, knows Chapter 11 rules well and will probably file again soon.

Just book your sibs onto the Jerry Springer show, maybe you can get some of it back.

Ha

 

[Dimsumkid]

Just book your sibs onto the Jerry Springer show, maybe you can get some of it back.

Ha

Lately, all I wish for is that I was born an only child!

 

[Dimsumkid]

Just got off the phone after waiting a week to find out what the attorney wanted to do to fix this problem. He thinks I'm also responsible for double checking his work and like I thought, I signed off on the mistake. He agrees we're off the amount I figured it was, around $3400. Since 2 parties have cashed their distributions, he says going back to court opens up a can of worms and that we'd have to pay his legal fees if we do. He's going to talk to the owner of the firm to come back with other options. I'm kind of upset since I was due $1600 (net amount of my admin fee) and $2100 distribution. As it stands now, all I'd get is $400 or so total (admin and distribution).

 

[Brat]

Were I you I would write the law firm a letter requesting that you be made whole in the amount of $3,400 (or whatever) and give them a deadline. They don't have to bother the judge at all.

 

[Martha]

Just got off the phone after waiting a week to find out what the attorney wanted to do to fix this problem. He thinks I'm also responsible for double checking his work and like I thought, I signed off on the mistake. He agrees we're off the amount I figured it was, around $3400. Since 2 parties have cashed their distributions, he says going back to court opens up a can of worms and that we'd have to pay his legal fees if we do. He's going to talk to the owner of the firm to come back with other options. I'm kind of upset since I was due $1600 (net amount of my admin fee) and $2100 distribution. As it stands now, all I'd get is $400 or so total (admin and distribution).

What!

I am with Brat.

 

[Dimsumkid]

I was asked an open ended question of "what do you propose as a fix for this?". I got the feeling they wanted me to take at least 50% of the blame for this so they don't have to reimburse me for the loss. I did tell him I wanted to get the $3400 back, since I felt he targeted my admin fee and distribution almost entirely. I also feel the firm's costs are more of a concern than making things right. I find it rather amazing that I've had 2 simultaneous lawsuits over the last 3 years, where we've had to pay them over 60k in legal fees. I also have 2 living trusts set up by them too. I don't know how much trusts will generate in fees, but I'm considering taking my trusts and not using them when the time comes. Any attorneys care to comment if this will help in my leverage to get this settled (pulling the trusts I mean)?

 

[REWahoo]

I was asked an open ended question of "what do you propose as a fix for this?
". I got the feeling they wanted me to take at least 50% of the blame for this so they don't have to reimburse me for the loss. I find it rather amazing that I've had 2 simultaneous lawsuits over the last 3 years, where we've had to pay them over 60k in legal fees. I also have 2 living trusts set up by them too. I don't know how much trusts will generate in fees, but I'm considering taking my trusts and not using them when the time comes. Any attorneys care to comment if this will help in my leverage to get this settled (pulling the trusts I mean)?

I'm no attorney but I'd write them as Brat and Martha advised above, remind them of the thousands in fees you've paid them in the past, and demand they make you whole. No need to threaten to move your trust business elsewhere, that will be obvious.

Oh, and regardless of how this turns out I think you should find yourself another law firm.

 

[Dimsumkid]

I appreciate all the suggestions, the attorney is going to talk to the owner about this when he gets back in the office. The reason I chose this firm is because they specialized in trusts, guardianships and estates.

 

[Brat]

And, if they don't make you whole file a complaint with the Bar, cc the Judge just for spite's sake.

 

[Texas Proud]

And, if they don't make you whole file a complaint with the Bar, cc the Judge just for spite's sake.

I am with all that say the law firm should be responsible....

When I was doing taxes... and if we made a mistake... we paid the penalty and interest (not the tax as you would have had to pay it anyhow)...

Trying to put blame on you for shoddy accounting (not shoddy legal work as it does not seem to be a question of law).... is not something that I would like to hear... 'Oh, you are supposed to check me for errors even though I am a professional and you are not and you are paying me a lot of money for my expertise' is what I am hearing...


Edit to add... The one thing that I like about where I work now is our boss usually says 'what is the right thing to do'.... even if there is no legal reason for us to do it.... I think the right thing to do is the law firm either gets things changed and gets the money back (without charging you for the time) or pay the money... either way, it is right for them to fix their mistake... and not profit from it...

 

[Dimsumkid]

Well, I just got a response (via email), the attorney will go back to court and revise the final accounting and attempt to get refunds from the 2 parties that cashed their checks. Both are the PITA siblings (1 tried suing me, other just wants to be an ahole). That should be a fun process, one check was deposited with the county treasurer and the other cashed the check after I told him there was a discrepancy and to wait. The last two, a banl guardian and last sibling agreed to wait to cash their checks.

I specifically asked the attorney to make sure we weren't responsible for the legal time involved (he alluded that we'd be responsible to pay for his time in our 1st conversation), I haven't gotten any response about his time that would be needed to fix this. He had to discuss this with the owner of the firm, although he gave me no details as to what the owner said, which led me to believe he needed approval to do this work.

 

[Brat]

IMHO that still doesn't relieve him of the responsibility of making you whole. I think he is engaged in CHA with the Principal of the firm. Were I you I would put your position in writing and CC the Principal.

If this firm had good business sense they would write you a check, his plan will cost the firm more $$$ and good will in the long run.

 

[Martha]

Again, based on the facts you shared I emphatically agree with Brat.

(But see my signature, my own CYA )

 

[Dimsumkid]

Brat,
Looks like I'll have to contact the owner directly, since my attorney chooses to only share what he wants to share with me. Thanks for the advice.

Martha,
Your signature puts me in a quandry, it states to consult w/my legal rep, that's where my problem lies! Now what?!?!

 

[Brat]

Just because a person is a member of the Bar does not guarantee that they have common sense.

Dimsumkid, every licenced professional must include a disclaimer when commenting about issues that may involve their profession. I am not a lawyer so I don't have those concerns. But I do have opinions about legal matters in part because I have experience with them both as opponents and team members.

 

[Martha]

Brat,
Looks like I'll have to contact the owner directly, since my attorney chooses to only share what he wants to share with me. Thanks for the advice.

Martha,
Your signature puts me in a quandry, it states to consult w/my legal rep, that's where my problem lies! Now what?!?!

Sorry for the CYA.

Brat is giving some very good and practical suggestions.

 

[Dimsumkid]

UPDATE: I apologize, this is a little long...

This has been put before the court for a revised final accounting. The most interesting thing happened, problem party #2 who has been completely removed from any of this, hasn't said or done anything, decided to send me an email yesterday. To give you more background, I personally performed 95% of the home repairs, partial gut bath remodel, whole house prep/repaint job, plumbing repairs, dishwasher replacement, basement floor tile encased in tar removal/repaint (took over 6 months) and paid over $55k in all funeral/mortgage expenses for 3 yrs. Total home materials cost was $2600. Only $300 spent on professional help, to keep house from foreclosure, we barely made a profit. This was to help keep the financial burden off other heirs. This party #2, never even bothered to thank me for this. This is the email I got after he got a copy of the court motion, I'll help to clarify some of these in (parens) and names removed:

=START=
Are you really doing this? What did they pay you $5000.00 (admin fee, atty decided, not me) for? Aren't you supposed to keep track of the accounting? The lawyers you are using didn't catch the mistake? What did you pay them $7000 plus for (legal fees)? Where is the paperwork for this bank mistake (his misinterpretation)? I see it as here say. All your emails stink of something fishy.
1) why was the check not mailed by USPS like I asked? (I hand delivered to his mailbox)
2) Why was it in a used envelope?
3) Why was it written a month after (problem party #1's) check was deposited in the Cook County Treasury?
4) Why the emails that say not to cash it? (I emailed him the day I dropped off the check telling him of this error, emailed again 2 days later, he never replied back, then he cashed it a week later)
5) Did you really make that much interestIf you did, shouldn't it be on the check as well? (Zero interest was made, his misinterpretataion)
6) Why does some of the items in the receipt portion seem excessive. (home repairs)
7) Did you sell any of the items? (same)
8) Did you return any of the items? (same)
9) Did you keep any of the items? (same)
10) Did you really use up all that fuel for lawn mowers? Really? (< $100)
11) Did you keep the ladder? ($99 for roof,gutter and siding repairs)
12) Where is the sale receipt for the house?
Sure, you think this is as petty crap. I still have more questions than answers.I strongly suggest you retract what ever you filed and take it out of your end. $5000.00 REALLY With our moving, we are tapped out. I used it to pay bills etc. I don't have deep pockets like you do. I have been out of work for over a year. I will fight this if I have to. I now have plenty of time on my hands. How about sharing with us?

=END=

I wanted to mention I was called out on the cost of gas for 3 yrs of weekly lawn mowing/snow thrower service, personally done by me. Never mind this would've cost $20-30/week if I hired it out and it didn't include my mileage gas cost either. None of my labor was ever billed, it was FREE. But, this party's opinion was I volunteered it, so I get no slack and no credit, no recognition. Call me crazy, but I lost out on investing this in a long term CD @ 5.25-5.5% back then to help ease the financial burden. Instead, party #2 feels he got singled out, accused me of lying and stealing from the estate too, and I should give up a mistaken overpayment of a distribution as a favor all the while being threatened with another lawsuit. Just a reminder, he was overpaid $564.32. Two further emails got uglier and littered w/F bombs telling me how selfish I am to not let him keep the overpayment since I got paid so much as the admin. Oh, and lose his number and address too! Last time we talked on the phone 3 years ago, I was told not to call, only email, he was too busy.

Do you think I interpreted this correctly? I believe I did. I know, I REALLY wish I was an only child....