My personal belief is that most probate disputes involve how an estate is administered, versus who gets what at the end of the day. I also believe that administration disputes are less a product of intra-family greed or any of the other “seven deadly sins,” but rather mostly the result of a family friend or trusted son or daughter being asked to do a job he or she is simply ill-equipped to do. If this often well-meaning person has the misfortune of hiring a lawyer who also isn’t up to the job: the fireworks are soon to follow.
That’s how I read this cautionary tale, where Monsignor Norman Bolduc, a Roman Catholic priest, is reported to have died owning a stock portfolio worth over $6.5 million. In his will, Bolduc left all his property to his parents. He named his best friend, another priest, the Rev. George Soberick, executor of his will. For complex reasons that remain unclear to me six months after Bolduc’s death the stock portfolio was worth only $500,000 (oops!). That’s when things got ugly. The following are excerpts from the linked-to story:
All of the accounts were finally liquidated about six months after Bolduc died. In the end, the value of the stock accounts had fallen to just under $500,000 from $6.5 million on the date of his death.
The greatest devaluation took place between early November 2000 and mid-December 2000, the period during which Soberick was petitioning for authority to act as executor.
Bolduc’s parents went to probate court arguing that Soberick did not act in time to prevent losses, given the state of the stock market. The probate court agreed with the parents and “surcharged” Soberick in the amount of $1,256,000, with interest of 5 percent calculated from Nov. 27, 2000, through April 15, 2005, the date of the court’s order.
A surcharge is the penalty for failure to exercise common prudence, common skill and common caution in the performance of the fiduciary’s duty and is imposed to compensate beneficiaries for loss caused by the fiduciary’s lack of care.
While this case is on appeal, it illustrates what can go wrong. Think twice about accepting an executor’s role; if you do, be sure to understand your responsibilities.
Accepting the job of personal representative of an estate is an honor that carries very serious ethical and legal obligations along with it. If you make mistakes that result in significant financial losses – don’t expect the surviving family to simply shrug its shoulders and buy the “but I never meant any harm” defense.