Keep Your Eyes on the Executor: Importance of Active Oversight of Matured Bequests

A charity receives notice of a matured bequest and waits for the distribution check to arrive. As it turns out, the check never shows up. It happens more than you think!

The very recent Kentucky Supreme Court case of In Re Brian Allen Logan (2024-SC-0052KB, 4/18/24) provides a good reminder to organizations about the virtues of active oversight of matured bequests.

Jack Estes died in 2018. His will named Attorney Logan as executor. Logan also drafted the will. The estate was worth just under half a million dollars, with most of it going to three charities. While serving as the executor, over a period of about five years, Logan made thirty-nine transfers of estate funds to himself ($170,000), overbilled the estate for his legal services ($36,000, only $6,000 appropriate), and transferred real estate to himself ($145,000) and did not pay a nickel for it. All total, he took over $400,000 from the estate, much of it by simply using a phone app!

Equally interesting is what Logan did not do. He did not file an inventory, nor did he file any periodic accountings. He neglected to file any tax returns and eventually resigned as executor and self-reported his misconduct to the Kentucky Bar. Logan has since been suspended from the practice of law. He has made some restitution to the estate, but still owes just shy of $300,000. Whether the charities will ever see that money is anyone’s guess.

CCK COMMENT: There were warning signs that this estate administration was off the rails. Active bequest management should include attention to the timeline of the administration and consistent communication. When an executor “goes dark,” intervention by the beneficiaries is essential. We suspect Logan avoided disbarment because of his self-reporting and willingness to make restitution.

This article was originally published on July 2, 2024, on our LinkedIn.