Update 2 BREAKING NEWS: Peter Kelly provides accounting of Thibeault estate

Mayor put $145,000 back into estate account two weeks after we exposed him removing $160,000.

As ordered by the probate court, Mayor Peter Kelly has filed an accounting of the Mary Thibeault estate for the seven-year period he served as executor of the estate.

The accounting shows that on March 2, 2012, Kelly deposited $145,000 into the estate account. Just two weeks before, on February 16, 2012, The Coast published its investigation of Kelly's mishandling of the estate, which showed that after Thibeault's death, Kelly had removed more than $160,000 from the estate and transfered it to his and his son's control. A week after our report, Kelly announced he would not run for reelection.

The accounting given to the court was prepared by the law firm Cox & Palmer.

In 2005, after he had removed the $160,000+ from the estate, Kelly filed an inventory with the court claiming that at the time of Thibeault's death, her estate was valued $503,730.73. With the complete accounting filed this week by Cox & Palmer there is a revised inventory, noting that at the time of Thibeault's death her estate was actually valued at $658,749.91, an increase of $155,019.18.

The difference between the two inventories is accounted for by Cox & Palmer as a "GIC adjustment" valued at $200,000, minus some corrected (downwards) values for the money in Thibeault's bank account when she died and of her household items and personal property.

I'm still reviewing the accounting, and will update this post later today.

Update 1, 3:45 pm

In the accounting provided by Kelly, several items stand out.

First is the professional fees charged back to the estate. Law firm Cox & Palmer was paid $15,656.34, mostly for work that would not have been required had Kelly taken care of the estate properly.

Likewise, Raymond Yuill Chartered Accountants was pad $4,410.49 for work it did in compiling the accounting.

Interestingly, even the payment of these professional fees appears to have been delinquent, as a total of $429.82 in interest fees from these two accounts were charged to the estate.

Also, because Kelly failed to pay federal and provincial taxes for the estate through the seven years he was executor, in addition to $7,817.61 in back taxes, the estate was charged over $4,261.05 in penalties and interest.

Just counting professional fees, taxes and the late charges on them, the estate paid out $24,327.88—money that arguably should have been distributed to heirs. To put that in context, for these two items alone, each individual heir lost out on $1,216 due to Kelly's mishandling of the estate, while a couple of the charitable organizations named in Thibeault's will receive about $2,400 less than they would have otherwise. (That's not including the interest loss over the seven years.)

Those are just the first two items that drew my attention. I still haven't examined Kelly's personal charges to the estate, or considered other issues. More, later.

Update 2, 4:50pm

Now that I've studied the accounting a bit more, I think my comments above about taxes might be under-playing the significance of Kelly's delays, at least so far as taxes go. Here's a page from the accounting that summarizes the taxes paid by the estate:

Above, I concentrated on the $4,261.05 charged to the estate in penalties and interest, but we should probably add most of the direct tax bill to that.

Think of it this way: an estate as simple as this usually takes about 18 months to resolve, so had Kelly not created problems for himself by removing the $160,000, and instead had simply done his job as required, the estate would have been charged taxes through part of 2006. After that, the remaining money would have been distributed to the heirs, tax free to them. So all the tax charges after mid-2006 are the direct result of Kelly's screw-up.

Let's call it half of 2006 taxes—say, $1,100, plus all the charges for 2007, 2008, 2009 and 2010, plus the penalties and interest for 2004, 2005 and 2006. That's about $7,600.

If we use that figure for taxes that should not have been charged to the estate, and add it to the professional fees, we get about $28,000 total. Or, around $1,400 per heir.

The accounting comes in a binder that's about three inches thick, so there's some heavy reading ahead of me, and some reporting yet, as I check some claimed expenses against reality. That's going to take me a while, so future updates will be in separate posts over the coming days.

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