‘He failed in his fiduciary duty’: My brother liquidated our mother’s 401(k) for her nursing home. He claimed the rest.

‘My brother, the executor of her will, coerced her during her illness to give him power of attorney’

By Quentin Fottrell 

Dear Quentin,

My mother recently passed away; she had blood cancer, which was diagnosed 2023. I was to receive half of all her assets. My brother, the executor of her will, coerced her during her illness to give him power of attorney. My mother and brother liquidated her significant 401(k) account into a fund to help with home/nursing care. 

My brother is now stating that the balance, which was not consumed by nursing-home costs, is lawfully his. I have requested a copy of the power-of-attorney document. I have, in-hand, all wills by my father and mother where it clearly states all assets are to be divided equally, including stocks in her 401(k). I also have texts stating that the funds were liquidated for this purpose. 

My understanding is that he failed in his fiduciary duty as the POA was void at death. 

What can I do?

The Sister

Dear Sister,

It may or may not have been a good idea, at the time, to liquidate your mother’s 401(k) to pay for her nursing home, but desperate times sometimes call for creative measures. To do it all at once raises questions about tax implications and your brother’s motivations for creating such a pile of cash. Given that he now lays claim to it, the answer seems to paint him in a bad light.

The only way he could access this money — as you say, his POA duties were null and void upon your mother’s death — is if he deposited this money in a bank account with his name on it. Either that, or he added his name to an existing account in your mother’s name. It’s an old trick: telling an elderly parent you’re a co-signer while making yourself a co-owner.

Larceny, the theft of someone’s property, is a felony in most states, depending on the amount stolen. He is likely betting on your legal inexperience and good nature to get away with it. There is a statute of limitations on elder financial abuse in most states, and you should treat this as such.

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Larceny, the theft of someone’s property, is a felony in most states, depending on the amount stolen.

The Securities Industries and Financial Markets Association, or Simfa, has a checklist for financial abuse, including “numerous withdrawals of smaller amounts” and “changing power of attorney or the beneficiaries on insurance or investment accounts.” Simfa recommends people in your position to contact an Eldercare Locator information specialist toll-free on 800-677-1116 weekdays, 9 a.m. to 8 p.m. Eastern time. It has both English- and Spanish-speaking specialists. 

But now you are faced with a dilemma: Can you prove that your brother committed fraud and/or elder financial abuse by helping himself to her substantial 401(k)? If he had, for instance, taken a reverse mortgage on your mother’s house to pay for the home, the remaining equity would have remained in your mother’s estate and, as such, would have gone through probate. 

The sooner you consult a lawyer and contact your late mother’s bank, the better. Executors and power of attorneys, as you suggest, don’t have unfettered power. They have a legal responsibility to act in their client’s best interest, and they can face civil and criminal penalties for failing in those duties. Self-dealing is obviously a no-no.

Your attorney will likely advise you to file a petition and remove your brother as executor and, hopefully, freeze any bank accounts that he has access to. Executors can be removed for enriching themselves at the expense of the estate through incompetence or financial malfeasance. You’re being hoodwinked and gaslighted by your brother.

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‘He failed in his fiduciary duty’: My brother liquidated our mother’s 401(k) for her nursing home. He claimed the rest.