The death of a parent is a difficult time that brings out strong emotions and brings any family conflict to the fore. Add to this the distribution of assets and there is a strong potential for family strife; This situation even increases when the manager is not suitable for the task.
Consider the hypothetical case of Jessica from Minneapolis, whose father died four years ago. He was entitled to a percentage of the value of his childhood home, which was sold shortly after his father’s death.
At the time, the lawyer said all beneficiaries must wait eight months before the proceeds of the sale are distributed to ensure unknown creditors do not come forward; this process was known as succession. This was twice the four-month minimum notice legally required in Minnesota. (1)
Jessica’s late father had no known creditors or debts, so his lawyer sent a letter to Jessica’s sister, the executor of the will, requesting that payment be expedited. Jessica was asked to sign a document and the funds were sent to her a few weeks later.
Now four years later. During this time, Jessica’s sister was unable to fulfill the terms of the will; stopped talking to other beneficiaries; postponed the transfer of three other properties to his brothers; he fired the original lawyer and exhausted the resources of the estate. Now he’s asking Jessica to return nearly half of her inheritance to help pay $60,000 in legal fees incurred in settling other estates.
Jessica thinks her sister mishandled the inheritance settlement process and doesn’t want to pay. He argues that his portion of the estate has already been paid, including deducting any associated legal and probate fees, and that he does not need to pay because he does not benefit from the rest of the estate.
Jessica is right that the process was mishandled. Aside from mismanagement of payments on other estates, payments made before the end of the probate process are not best practice and are not recommended, so Jessica should have waited.
Before making any payments, it is best to have all the affairs of the estate settled first, including payment of creditor claims against the estate, executor compensation, taxes and fees incurred in settling the estate.
Typically, bequests are paid out of the value of the remaining property after deducting all expenses and claims; this is called “residual property”.
In the case of this will, some bequests were made in the form of certain properties, but in the event that the estate is unable to pay all its obligations, the sale of these properties to pay the bills will take precedence over the will.
Unfortunately, Jessica had also likely signed a restitution deed when she signed the release – and this would have legally forced her to give back some of her inheritance to help pay for additional legal fees incurred in settling the estate.
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Jessica is able to pay back the money from her savings, which she has set aside for a period of time. emergency fundbut paying it off would set him back financially as he would have to rebuild his emergency fund at the expense of regular contributions to his retirement funds.
He or she may want to work with their financial advisor to develop a plan to help offset the loss of these funds.
Jessica may also choose to fight this request in court, as she already has a bad relationship with her sister. But this may cost more than her sister wants, and the release and repayment deed she signs could potentially limit her recourse against the executor.
Jessica may still want to consult a will and estate attorney to have her sister removed from the will. Replacing it can help prevent further expenses and eventually lead to closing on the property.
It’s not easy to remove an executor, but Jessica can argue that her sister should be removed due to her inaction and delay in distributing three estates, her mismanagement of costs and lack of communication, and her hostility towards other beneficiaries.
To do this, Jessica would need to gather all of the guardianship documents, including the original will, as well as evidence supporting her claim to have her sister removed. He would then file a formal request with the probate court. A successor executor may be named in the will, but if not specified the court may appoint an individual.
Settlement of a property is a complex and time-consuming process. It is important that beneficiaries fully understand the consequences of anything they agree to or any document they sign.
Being an executor requires great responsibility, and the person chosen must be prepared and competent to carry out these duties. Otherwise, beneficiaries may need to take action.
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Property Manager (1).
This article provides information only and should not be construed as advice. It is provided without any warranty.
