I have received an inheritance from my father's estate, but the executor wants me to return it. What should I do?
“The executor has failed to fulfill my father's wishes and has exhausted the estate's resources, including tapping into the proceeds from the sale of my family home.” (The subject of the photo is a model.) – Getty Images/iStockphoto
My father passed away in January 2022. In June 2022, my childhood home in New Jersey was sold and I would receive 20% of my father's 50% interest in the house. My mother kept the remaining 50% as part of her residual trust, which excluded me as a beneficiary.
My late father's lawyer stated that all beneficiaries had to wait ten months before the payouts from the sale of the house could be released. I was told that if no unknown creditors came forward within that period, my 20% share would be released to me.
Since my father had no unknown creditors or debts, the attorney sent two separate letters stating that the executor of my father's will (my sister) wanted to expedite my payout and asked me to sign a waiver so that my share from the sale of the home could be sent to me. After two weeks I got a check.
Two and a half years later: The executor (my sister) fired the original attorney, hired a new one, spent over $75,000 in legal fees, spoke to none of the beneficiaries, and failed to finalize the terms of my late father's will, including the transfer of three other properties assigned to my siblings.
I am not a beneficiary of the other properties; I was only entitled to a portion of the sale of my parental home. Yet the executor has failed to fulfill my father's wishes and has exhausted the estate's resources, including tapping into the proceeds from the sale of my family home.
The newly appointed lawyer has demanded that I repay almost half of the amount I received and has filed a civil suit to force me to do so. Since no new creditors have come forward and I am not a beneficiary of the other properties that caused the delay in settling the estate, do I have to repay some of the proceeds?
Why I left NJ
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You are not responsible for the executor's mismanagement of your father's estate or for the legal costs resulting from your sister's increasingly litigious behavior. – MarketWatch illustration
So much about dealing with your father's estate stinks.
First, there is a statute of limitations in New Jersey for contesting a will, which has long been far exceeded by the shenanigans with your father's estate. Second, the executor of your father's estate slept on the job and/or had an unexplained insanity. Third, it is not up to you to return the money; it is up to the executor's lawyer to legally force you to return the money.
This is a vortex of chaos, and the executor and her attorney want you involved. You are responsible for claiming your inheritance and signing for the release of this money, and for waiting the required amount of time under the law in your country. You are not responsible for the executor's mismanagement of your father's estate, and you are not responsible for the legal fees resulting from your sister's increasingly litigious conduct.
Your father's lawyer was mostly right. In New Jersey, the standard waiting period for creditors to file claims against an estate is nine months, starting from the date of the decedent's death. Therefore, executors of wills should wait at least this time before distributing assets to beneficiaries to avoid personal liability. Often, real estate attorneys will wait a year to consider paperwork and due process.
About that pesky statute of limitations: “In New Jersey, once the proponent of a will has served a notice of probate, interested parties or surviving relatives typically have 120 days to contest a will,” says Scura, Wigfield, Heyer, Stevens & Cammarota, a law firm with several offices in the state. “This period offers interested parties the opportunity to object to the validity of the will. You must act quickly within this period.
“Missing the deadline will prevent a challenge to the validity of the will unless there are exceptional circumstances justifying an extension, which would typically involve proving fraud, misconduct or incapacity during the probate process,” the law firm added. “If you are an out-of-state resident with an interest in a will or a potential interest, New Jersey law provides an extended period of 180 days from notice of probate to contest a will.”
As you say, your father's attorney did his due diligence and followed the letter of the law. The subsequent actions of your sister, the executor, make little sense. Assuming you have the full story and/or have not withheld anything, this whole sorry story strikes me as both unprofessional and unprecedented – assuming this case doesn't get thrown out of court by the judge.
An executor trying to reclaim previous payouts? That's bad manners at best, or a deliberate abandonment of her fiduciary duty at worst. Your attorney is the best person to advise you in the future, but I would not be surprised if they suggest that you petition the court to remove your sister as executor for misconduct, endangering the estate's assets, mismanagement, or all of the above.
You do not have to prove intentional misconduct. “Beneficiaries of an estate may request the removal of a personal representative if they have demonstrated that they cannot competently manage the estate's affairs,” according to the Martin Law Office LLC. “Especially in scenarios where the estate contains valuable assets or a significant amount of money, properly managing those assets is important.
“Improper choices in holding, investing or liquidating funds may be grounds for requesting the removal of a representative from office,” the law firm added. “If they have cost the estate money or attempted to conduct transactions that would reduce the value of the estate, the courts may agree that their removal is in the best interests of the beneficiaries.”
It's time to permanently clip the executor's wings.
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