I have a dilemma and wish to consult the collective knowledge of the Mustache community.
My MIL recently passed, leaving my husband’s sister as executor and trustee. Her actions have caused a collective raising of eyebrows and blood pressure.
Example: Selling MIL’s house: “The sign will go up March 1st. The price will be $399,000, as is. But the realtor says we probably won’t get more than $375,000.”
The house does need quite a bit of cosmetic work.
A few days later: “The house sold for $365,000.”
The realtor’s and SIL’s kids are apparently in high school band together.
The realtor evidently sold the house to her own father.
SIL has reported that the amount due on the reverse mortgage has grown to $306,000 due to ‘closing costs.’ When my husband last saw a statement on this—a few months ago—the amount was $287,000. To my knowledge, any closing costs are built in to the front end of reverse mortgage loans, but I am not sure about this. The remaining equity in the house is the only asset remaining in the trust.
My husband has requested copies of the statement showing the balance due on the reverse mortgage as well as signed copies of the real estate contracts and appraisal. SIL claims not to have them and that she is only required to give him an accounting (through the HUD-1) once all is said and done.
I’ve been looking at the California laws around this, and have found this:
“Upon reasonable request by a beneficiary, the trustee must provide the beneficiary with a report of the information relating to the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particular terms of the trust that are relevant to the beneficiary's interest.” California Probate Code §16061.
As I read this, however, a report does not necessarily mean the original documents.
My questions for the collective Mustachian mind:
Have any of you dealt with an issue like this?
Are the actions of the realtor ethical?
Are there closing costs associated with the payoff of a reverse mortgage?
Is it time to lawyer up?
There’s not much left to the estate, especially once it’s divided among four beneficiaries, so the cost benefit is debatable. Your answers and insight are much appreciated!