How to handle a retro-reduced inheritance?

October 13, 2008 6:28 AM

How to handle a retro-reduced inheritance?

This spring I received an inheritance from my grandmother. Initially there was a check to each of us for $n, and later a (much larger) check for %x, the leftover balance. Now I am told that the executor/overseer, her step-son (btw), claims to have made a mistake on the calculations and the % portion was distributed before someone "cashed" one of the $n checks (for $100,000). He is now seeking to recollect on this error. For me, this is to the tune of about $20k.

Perhaps ordinarily I would just shrug and be as helpful as possible. But the timing is odd. After watching my family's portfolios fall nearly 40% in the past few weeks, combined with a suspiciously dispersed inheritance in our family 20 years ago, it is cultivating,harvesting, and curing some weird feelings.

1) Who "overlooks" a $100,000 check? I learned in 6th grade math class to balance a checkbook by what you write out on it, not what is already cashed. If this moron missed this, what else did he miss? How large was the estate in order to miss this?

2) What are my actual obligations? If the check was already cut to me, do I legally owe anything?

3) Obviously, I am seeking legal advice ASAP but wanted any immediate nerd wisdom/questions to ask/etc

4) Tips for negotiating with family that I am socially very distant from? My sister and I are the only surviving islands in this midwest-conservative river. The executor in question's father had framed pictures of Reagan and Bush on his wall. I was essentially shunned from this part of the family at age 15 for having a pierced ear. My sister was not given college funding (as everyone else in the family was) because of her controversial decision to study art instead of home-ec or teaching (the only appropriate options for a woman).

I would really like any guidance, how to talk to a lawyer, what to ask, how to socially handle this, anything. Its just not stuff I want to deal with and I resent that I am even needing to. Thanks for understanding and any possible guidance.

posted by anonymous to work & money (14 comments total)

20k means that spending money on an attorney to make sure this is all above board makes sense.
posted by Ironmouth at 6:51 AM on October 13, 2008 [4 favorites has favorites]

He said he said he was looking for advice on how to talk to a lawyer, not if he needed one.

I would also want a look at the books, even if this means having to deal with people you would rather not have to deal with.

And if it was a mistake, that sucks, but can be understandable.

If it's not, then you might have a case for fraud, and even bring up this option might shut the whole request down.
posted by cjorgensen at 7:20 AM on October 13, 2008

IANAL.

CONCEDE NOTHING. You have the assets now (I assume you've cashed any checks), so it's up to him to prove that you owe him. Demand documentation. Make him pay for an accountant to do an independent audit.
posted by mkultra at 7:46 AM on October 13, 2008

You may really need an accountant. I'd ask for an accounting of how the estate's funds have been disbursed.
posted by theora55 at 8:03 AM on October 13, 2008

1) Who "overlooks" a $100,000 check?
Who doesn't cash a $100,000 check straight away?

Sounds like a fairly straight forward mistake (and the executor isn't very bright), he divided out the leftover balance without checking all the checks had been cashed. Really he should have been able to work out what everyone was owed without having to do 2 rounds of checks (ie. he should have know what the leftover balance would be after all the $n checks had been paid) but at the end of the day, you've been paid more than you're entitled to and you need to give it back - remember someone else is out $100k because of this mistake. Get a copy of the will and all the account transactions so you/your accountant can check them out to verify that the situation is as the executor has explained it. If everything checks out, give the money back, if not take all the records to a lawyer.
posted by missmagenta at 8:09 AM on October 13, 2008 [1 favorite has favorites]

This isn't a mistake that a competent person would make, but it's an easy mistake to make nonetheless. Check everything, but be prepared for the possibility that you will have to pay the money back.

If you and your lawyer decide that you need to pay the money back, ask for a payment plan.
posted by grouse at 8:59 AM on October 13, 2008

As for how to talk to an attorney, you don't need to know how to do it. All you need to bring is all of your documents. A competent attorney will know the questions to ask and how to set you at ease regarding the process.

I think what you need to think about is your anxiety regarding all of this. I have a pretty good idea how my clients act and 9 times out of 10 when I see a question about this it really involves my anxiety. I'd focus on that and let the lawyer take care of this.

Regardless, you need a lawyer to review the statutes in question to determine what is going on. I have more than a passing familiarity with this and it is relatively complicated. The stepson should not have been handling an estate of this magnitude without legal advice.
posted by Ironmouth at 10:40 AM on October 13, 2008

they're either very incompetent or quite dishonest, tell a lawyer what you told us, then he/she'll take care of this. you'll be OK
posted by matteo at 10:44 AM on October 13, 2008

I personally wouldn't jump to lawyering up, at least with my family where I know everyone and have a sense for who's straight and who's not. I would politely but firmly:

1) ask to see the books and receipts
2) call the other relatives to verify that they did or did not receive the money shown in the transactions
3) then decide whether to call a lawyer

I would not cough up the money before that, however.
posted by zippy at 11:17 AM on October 13, 2008 [1 favorite has favorites]

I don't think the executor is necessarily incompetent or dishonest. You don't say what period of time passed between the distribution of the original $100K check and the issueing of the second checks, but the longer that passage of time was the more explainable this mistake gets. You also don't tell us what the language of the actual will is -- for example if the will specifically instructs the executor to do something like "distribute the remains of the estate proportionally among the inheritors" then it becomes somewhat logical after a certain passage of time to assume that what's left in the savings account is the "remains of the estate" and split it up accordingly if one isn't familiar with what the actual laws are re the time period one is allowed to cash a check before it becomes void, etc.

I know it is a serious personal failing, but I write so few checks that I do not balance my checkbook. Not everyone does. Sorry.

It might be relevant for you to know that it is not uncommon for the person who makes a will to appoint a member of the family -- who also might stand to inherit money from the will -- as the executor of the estate. This is because the executor receives certain fees for carrying out the instructions of the will, and because folks often figure that it's better to give the money from those fees to a member of the family rather than a damned lawyer. I know this because even though I have no experience with trust and estate law, my aunt has named me executor of her will for exactly this reason. Having now read this post, I will try very hard not to make the sort of mistake that you outline here, but the fact that the executor made this mistake simply signifies inexperience to me, and not an intent to do something underhanded or do you wrong.

Your grandmother's stepson made a mistake. I think you are taking it personally where it was not intended personally. The fact that you have "watch[ed] my family's portfolios fall nearly 40% in the past few weeks" sort of illustrates this -- the stepson had nothing to do with the market crash, obviously, and certainly the extra $20K could come in handy for you, but these tough financial circumstances may be causing you to see ill will toward you that is not really a factor in the stepson's request.

Finally, I think any obligation you have to return the $20K will depend on the terms in which that money was distributed to you originally. Were you simply sent a check in the mail with no letter? Or were you sent a letter as well that included some wishy washy language about this being the calculated final distribution which was subject to change? You may have a legal argument that the distribution to you was final and that you are entitled to keep it; however you might still want to think about whether you think that would be fair to the person who sat on their check a little two long and gets a much smaller recovery despite your grandmother's explicit intentions.

Good luck!
posted by onlyconnect at 12:21 PM on October 13, 2008

I know it is a serious personal failing, but I write so few checks that I do not balance my checkbook. Not everyone does. Sorry.

It might be a minor personal failing for you, and only you will have to endure the minor consequences, if any, of this choice. But if you were managing hundreds of thousands of dollars belonging to other people then not balancing a checkbook grows from a personal failing to incompetence.
posted by grouse at 12:52 PM on October 13, 2008 [1 favorite has favorites]

My remark about my own checkbook habits was aimed at the OP who said he learned how to balance his in 6th grade. It was intended to show that not every responsible adult actually does balance their checkbook. I am a responsible adult, and I never balance mine. And over the last ten years, I have never had any negative repurcussions from failing to do so.

Clearly, the executor made a mistake, but I disagree with you that this mistake indicates that the person is "incompetent." I think this is a mistake that an inexperienced executor might have made, particularly if they were grieving for their deceased stepmother at the time of the distributions. We can argue over whether there is an objective answer re the executor's "incompetence," but I think the better answer is that we're both entitled to our subjective opinions.
posted by onlyconnect at 1:23 PM on October 13, 2008

"Never attribute to malice that which can be adequately explained by stupidity."

That being said, I have no faith in my fellow man. Kindness is like common sense, off lost somewhere riding around on the back of a unicorn.

Either way, they fucked up so I wouldn't be relying on them to get it right this time. 20K is quite a mistake by anyones standards.

You need an accountant. You might need a lawyer, but they will need an accountant anyway. I think there is such a thing as an accountant/lawyer? - A Commerce Lawyer?? But I'm not sure if that would work out cheaper or not.
You would need to evaluate the benefits and cost...?

But to answer you question, don't worry, just go in with your paperwork and your story - it's their job to extract the pertinent details.

**It is a good idea to make a list of concerns, info - anything and everything you wish to discuss before you go and see any lawyer about anything. Their time is expensive so it's best to use it as productively as possible!**

If it were me - I'd have all the paperwork from the Estate sent to me. (I would not at all be a dick about it!!) If it all seemed to look straight forward and most importantly the step son was honest, open and helpful about the whole thing (hence not being a dick! - this is a test!) then I may get an accountant? Depending on the complexity and his handling of it.

If it looks shady, incomplete or he is being a tosser about handing over copies of stuff that logically anyone would be 20K worth of curious about - Lawyer up! You were right to be suspicious.
posted by mu~ha~ha~ha~har at 6:21 PM on October 13, 2008

Read about unjust enrichment. Ask a lawyer about your options.
posted by astrochimp at 8:45 AM on October 17, 2008 [1 favorite has favorites]