NSW Stepmother withdrawn from deceased husband's personal account.

[Mimaki]

My wife's father passed away a while back. It was his second marriage, both independently wealthy. Approx 5 days prior to his passing, according to his widow - she was instructed to sell a number of shares. The day prior to him passing, the proceeds of shares were deposited to his personal account. The day of his death ( he passed in the wee early hours ) said stepmother transferred $20,000 to her personal account - and at later date followed by another $20k + $5k.... $ 45,000 in total.
Probate has been granted and the Estate "distributed" with the exception of the $45k our solicitor has demanded she as widow - account to the Estate for. A response from her solicitor to my wife states that:
"The Deceased sold the shares as he had decided to give to our client the proceeds from the sale of the ______ Shares and ______ Shares prior to his passing.
The sale proceeds from the ______ Shares and ______ Shares were credited into the Deceased’s nominated bank account on the __/__/ 2018, however by nature of the Deceased’s condition he was unable to transfer the sale proceeds to our client immediately, and he subsequently passed away moments later.
In principle, the Deceased made to our client a gift of the proceeds from the sale of the _____ and _____ Shares.
Subsequent to the Deceased’s death our client honoured the Deceased’s gift and transferred the sum of $45,000.00 to her account.

This response seems highly irrational and almost negligent in so much as legally the funds were not hers AND any "gifting" is merely heresay from her - but obviously her solicitor has great trust in her word.
The stepmother/widow is NOT a beneficiary of the Estate. What makes it "complicated" is that the stepmother/widow is also joint Executor with the deceased's son.
The son and daughter of the deceased are the only two beneficiaries of the Will/Estate.

Two initial questions ( and add to if you so wish):
1) Legal rights / ramifications of her withdrawing from her husbands solely owned account ( obviously she has online banking passwords). Please give a LEGAL perspective rather than just "should contact the bank". I am aware that as Executor she has a legal responsibility to the Estate - but her solicitor obviously sees it differently with his belief prior to death that the transaction were his desire/wishes.
2) Is the next best avenue for my wife to sue the "Estate"being the Executors - her brother and her stepmother - who obviously is also the widow.

Cheers

 

[Mimaki]

Anyone that can give legal reference to the withdrawing of funds from a deceased's account would be very much appreciated. Case Law reference .......better still.
I have been unable to locate any such "law".

 

[Rob Legat - SBPL]

For a start, executors must act jointly. The stepmother can’t act alone.

Second, the stepmother is acting in a clear case of conflict of duty and interest - her duty to preserve the estate for the beneficiaries as an executor versus her personal interest in receiving the money. Its even worse that this ‘gift’ is just on her say so.

I’m assuming she wasn’t a signatory or account holder on the bank account? If that’s true, then unless she had a power of attorney she has no right to withdraw from his bank account. Even with a power of attorney, she’d be in conflict again and most (probably all) self-interested transactions by attorneys are prohibited.

That excerpt from the lawyer‘s letter is pure rubbish. They can’t say what the father intended to do, and they’ve failed to even qualify it by making it clear that that is what their client instructed.

I suggest your wife needs to get onto her brother and ask what the hell is going on. If your wife does intend to take action, tell him that he’ll necessarily be dragged into the action as the proceedings will be against both executors. And I suggest you get a lawyer onto it. The stepmother has lawyered up, and your wife should do the same if she’s going to fight it. I further suggest you look at what it’s going to cost to see whether it’s worth it overall.

 

[Mimaki]

Thanks for the reply Rob.
Yes no legal authority on account. Unfortunately it is one of those situations whereby the stepmother wiped her hands of the stepchildren the day he passed. All negotiations were through solicitors. Whilst the son was happy to be amicable and work jointly as co-executor, she on the other hand just "did her own thing" fearing she would be bullied ( or so she claims ) however the son holds a position of community in law enforcement so this was never going to happen due to potential repercussions.
She has intermeddled purely and simply believing that she can do whatever she wants with the cover of "it was my husband's wishes" and on this and many other occasions, her solicitor has responded with:
"In the event your client elects to continue his pursuant and dispute the above transactions our client will vigorously defend such proceedings".

Personally I am uncertain how he could commit to paper this intention on his client's behalf when it is clear legally - she has breached the law.