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Sat, 27 Dec 2025 17:02:47 -0800
marlon from private IP, post #14551938
/all
wills, inheritance & executors
https://www.aol.com/articles/inheriting-ira-advisors-warn-3-140000602.html
My dad died 4 years ago and I already got my inheritance. Now my sister, the executor, wants the money back. Do I have to return it?
Moneywise
Vawn Himmelsbach
Sat, December 27, 2025 at 1:00 PM EST
The death of a parent is a difficult time, bringing out strong emotions and highlighting any family conflict. Add to that the distribution of assets, and
there’s the strong potential for family strife — even more so when the executor is not suited to the task.
Consider the hypothetical case of Jessica from Minneapolis, whose father died four years ago. She was entitled to a percentage of the value of her childhood
home, which was sold shortly after her father’s death.
At the time, the attorney said all beneficiaries needed to wait eight months before the proceeds of the sale would be disbursed to ensure no unknown creditors
came forward — a process known as probate. This was double the legally required minimum notice period of four months in Minnesota. (1)
Jessica’s late father had no unknown creditors or debts, so his attorney sent a letter to Jessica’s sister, who was executor of the will, to request an
expedited disbursement. Jessica was asked to sign a release and then the funds were sent to her a couple of weeks later.
Now it’s four years later. In that time, Jessica’s sister has failed to execute the terms of the will; stopped talking to the other beneficiaries; delayed
the transfer of three other properties to her siblings; fired the original lawyer and exhausted the resources of the estate. Now she’s asking Jessica to
return almost half of her inheritance to help pay $60,000 in legal fees incurred during the disbursement of the other properties.
Implications of mismanaging an estate settlement
Jessica feels that her sister has mismanaged the estate settlement process and doesn’t want to pay. She argues that her part of the estate was already
settled, including having the associated legal and probate fees deducted, and since she didn’t benefit from the remainder of the estate, she shouldn’t have
to pay.
Jessica is right that the process has been mismanaged. Aside from the mishandling of the disbursement of the other properties, disbursements before the end of
the probate process are not best practice nor recommended, so Jessica should have been made to wait.
It’s best to have all affairs of the estate settled first, which includes paying any creditor claims against the estate, executor compensation, taxes and fees
incurred to settle the estate, before making any disbursements.
Typically, inheritances are paid out of the value of the estate that remains after all the costs and claims have been deducted — what’s known as the
“residuary estate.”
In the case of this will, certain bequests were made in the form of specific properties, but if the estate is unable to pay all of its obligations, selling
these properties to pay the bills would take precedence over the bequest.
Unfortunately for Jessica, at the time she signed the release she probably signed a refunding bond as well — and this would legally compel her to give some of
her inheritance back to help pay for the additional legal fees incurred in settling the estate.
Jessica can afford to pay back the money out of savings she set aside for an emergency fund, but paying it will set her back financially since she’ll need to
rebuild her emergency fund at the expense of her regular contributions to retirement funds.
She may want to work with her financial advisor to develop a plan to help recover from the loss of those funds.
Jessica could also choose to fight the request in court, as she already has a poor relationship with her sister. However, this could cost more than her sister
is asking for, and the release and refund bond she signed could potentially limit her recourse against the executor.
Jessica may still want to consult a wills and estate lawyer to try having her sister removed as executor. Replacing her might help prevent further excess costs
and finally lead to closing the estate.
It’s not easy to remove an executor, but Jessica could argue that her sister should be relieved of her duties because of her inaction and the delay in
dispersing of the three properties, her mismanagement of costs and her lack of communication and hostility toward the other beneficiaries.
To do so, Jessica would need to gather all probate documents, including the original will, as well as evidence supporting her argument for having her sister
removed. She would then make a formal request to the probate court. The will may name a successor executor, but if it doesn’t, the court may appoint one.
Settling an estate is a complex and time-consuming process. It’s important that beneficiaries fully understand the implications of anything they agree to or
any documents they sign.
Being an executor entails great responsibility and the person chosen should be prepared and competent to fulfill these duties. If not, beneficiaries may need to
act.
Sat, 27 Dec 2025 20:19:31 -0800
2tierreality from private IP
Reply #11369214
Attorney fees incurred in regard to the administration of the estate are "first tier" claims in most states. That and decedent's income taxes owed to the IRS
are always going to end up back in the lap of the estate beneficiaries.
If it's a problematic estate, it's always best to wait to distribute until all of the loose ends are tied up.
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