Do I risk it?

March 16, 2008 6:12 PM

I'm receiving a sizable inheritance in the form of stock from a deceased relative. However, there's fairly good evidence that the person who's managed the relative's affairs all these years (due to this relative being incapable of managing their own affairs) has intentionally sold a vast majority of that stock because they didn't want to draw down their own inheritance. If I contest this, though, there's a clause in the will that cuts my inheritance to $1. Do I take the stock that's offered me, or should I risk it on recovering the rest?

I'm looking at a large inheritance from a relative who has passed away, let's say $X. But based on conversations with accountants involved with the estate (and some independent advisors), I'm probably looking at receiving more than three times $X that if I can prove malfeasance. And there are tell-tale signs of malfeasance.

The relative had substantial holdings in two companies. I was to receive Y number of shares in company #1. At the time of the will's writing 20 years ago, company #1 and company #2 were about equally represented in the portfolio. A quick glance at the current balance sheet for the estate shows that there are many, many more shares in company #2 than company #1 -- and company #2 is much more valuable per share than company #1 (and has consistently been so). Company #1 stock was apparently sold off over the years while company #2 stock wasn't. The person managing the affairs of the relative (he/she had power of attorney) is listed in the will as receiving the stock in company #2 but none of company #1.

In addition, both stocks paid large dividends, to the point that a person could live very comfortably on just the dividends -- there is little reason for anyone to be selling that much stock to take care of expenses.

The person who had power of attorney over the relative's assets had prior knowledge of the will, and these financial decisions look quite suspicious. This person is also the executor of the will.

There are other signs of malfeasance there as well. We think a forensic audit should be able to build a solid case. But once we move beyond the forensic audit, then we're contesting the will. There's a clause in the will that states any heir who contests the will shall receive $1. If the case went to trial and I won, the ruling would supersede that clause. But if I lose, I lose the original $X.

These numbers are huge for me. I didn't expect to inherit anything from the relative, and now I'm looking at substantial sums of money. I'm not sure what to do. My significant other thinks I should take $X because we would be debt-free, we could build a decent nest egg, and we could have it sooner rather than later -- due to the structure of the estate the stock will not need to be probated. (And honestly, our debts are becoming an increasing drag on our bottom line.)

Others close to me think I should pursue the case and go for the $3X, even though I may be looking at years going in and out of court. The lawyers I've talked to have all said it smells fishy and think there's a case here (and they'd take it on contingency.) I'm just still in shock I'm getting anything. $X is a large amount of money; $3X would satisfy every one of my long-term financial goals. But still, even with the initial evidence, I don't know if it's worth giving up $X to try for $3X.

Should I take $X and walk away, or should I risk $X and sue for the $3X I should be receiving? Lawyer up or cut my losses?

posted by anonymous to law & government (37 comments total)

Is your relationship with your family important to you? How would they feel about you suing a relative?
posted by box at 6:29 PM on March 16, 2008

By the time you paid the lawyer and the experts, how much of that 3X would you have left? I'd take the money in hand.
posted by headspace at 6:29 PM on March 16, 2008

If the numbers are life-changing for you, then you should take the guaranteed $X. Ask yourself: if you already had $X, would you take a 3:1 bet on winning this case?
posted by nicwolff at 6:30 PM on March 16, 2008 [1 favorite has favorites]

You already know that you're gambling with seemingly large sum of money. There is a possibility that you might not win the suit. In your mind, is the pursuit of "justice" worth as much or more to you than $X? If such is the case, sue.

On the other hand, will you be absolutely devastated if you walk away with only $1 of $X? If so, I vote for walking away, and investing that amount wisely (high-yield savings, CDs, Roth IRA, Money-Market, whatever) after assessing your risk tolerance.
posted by numinous at 6:33 PM on March 16, 2008

Your lawyers are literally the only people you should be taking advice from. You have offered no details which could inform anyone of what needs to be done. Indeed, X is the most important fact and you have left it out.

An attorney should be handling this.
posted by Ironmouth at 6:39 PM on March 16, 2008 [2 favorites has favorites]

I'm guessing that to take the case on "contingency," the lawyers would receive 1/3 of what you realize if you win. If so, that takes you to $2X, unless by showing malfeasance you get whatever to defendent would have otherwise gotten as well.
posted by Pressed Rat at 6:57 PM on March 16, 2008

These numbers are huge for me. I didn't expect to inherit anything from the relative, and now I'm looking at substantial sums of money.

Take the X and walk away without worrying about what might have been. If there was malfeasance, let it be on the executor's conscience or karmic balance or whatever you might believe in, and not infect you with hard-heartedness and greed.

To reiterate, when you say that you would receive 3X if you sued and won, do you mean that you would be awarded 3X and receive 2X or 1.5X, or do you mean that you would be awarded 5X or 6X and receive 3X?
posted by ROU_Xenophobe at 7:00 PM on March 16, 2008

From an outsider's view, I'm not sure I understand the issue? Has the executor/PA sold more shares in company #1 than you were entitled to? Are you receiving fewer shares because of the stock sale? It seems very cut and dried if they willed you a certain number of shares in a stock.

If you aren't vested in the company #2, it doesn't seem as if that has any bearing on the company #1 stocks. I've had stocks split and all sorts of bologna, which would cause an imbalance in the share quantity of a portfolio.

It seems to me like you should really ensure you have a good forensic audit and go from there. Consult a few attorneys...

But maybe just take what was willed to you if it was a quantity of shares. That seems very simple.

AND, I agree, the magnitude of the sum of money would be important. If it is $10,000 to $30,000---or if it is $100,000 to $300,000 it is a very different story.

My father hasn't spoken to his sister in 3 years because of a lawsuit over their aunt's will (Aunt was executor...and the will surprisingly was changed a week before sister had Aunt deemed incompetent). If you're prepared to polarize your family and burn bridges....
posted by rocket_johnny at 7:08 PM on March 16, 2008

Assuming that as pressed rat says you would get $2X (sounds about right) if you win I would take X. Absolutely - it could take 10 years, you could get nothing, or you could be like Anna Nicole Smith and be dead before it gets resolve.

However - after consulting your lawyer and ensuring that it does not risk your X perhaps you could propose a 'settlement' with the other party? They don't have to know you're bluffing, and if you have a serious case they may in fact pay you to go away. Give them the hard decision - "Do I give lose a smaller sum of money now or all of it (and potentially face criminal charges) if I lose?"

If they call your bluff at least you gave it a shot, and no harm done. You should be able to negotiate this for a fixed rate or a small contingency with a lawyer, but make sure that it really is riskless to you first. Good luck!
posted by true at 7:09 PM on March 16, 2008

Take the original X and sock it away where it bears interest. You don't need the hassle of a court fight where you would have to pay lawyers and the truth is you might be awarded 3x but not recover 3x -but yet enriching lawyers on both sides. Be happy and enjoy instead of being hassled over and over and over again.

I believe in divine justice. And I also have no problem in you mentioning the apparent malfeasance to the malefactor. Just so they know YOU know.

On preview-true may have a point.
posted by konolia at 7:12 PM on March 16, 2008

Uh, 2:1, not 3:1 - pardon my math error. If you already had $X, would you take a 2:1 bet on winning this case? And assuming the truth of Pressed Rat's guess about contingency-case fees, it's more like double-or-nothing.

So, how much more would having $X change your life than having $2X? That's the only way to make this decision rationally, and you'll still need at least one lawyer's opinion on your chances of winning.
posted by nicwolff at 7:12 PM on March 16, 2008

However - after consulting your lawyer and ensuring that it does not risk your X perhaps you could propose a 'settlement' with the other party? They don't have to know you're bluffing, and if you have a serious case they may in fact pay you to go away. Give them the hard decision - "Do I [...] lose a smaller sum of money now or all of it (and potentially face criminal charges) if I lose?"

This.
posted by the christopher hundreds at 7:14 PM on March 16, 2008

There are all kinds of ways around this, but you need a lawyer experienced in will contests to find out what they are in your case. You will want to find a solution that does not meet the definition of "contesting the will" as defined by the will in question and your state's statutory and case law. For instance, you may bring suit against that attorney-in-fact for breach of fiduciary duty, or you may simply have a discussion with this person about possibly contesting the will, pointing out that the cost of defending the contest will be borne by the estate and thereby reduce everybody's inheritance. But, repeat, none of this can happen without a lawyer experienced in this area of the law.
posted by Enroute at 7:19 PM on March 16, 2008 [1 favorite has favorites]

Walk away with the money - the saying of "You can't stir shit without getting some on you" is as applicable here as it is with prolonging drama or getting the last word.

Lawsuits are hard and not pleasant, even for people who have airtight cases. You're only going to get 2x after contengency fees. You may completely shit on a family member, and potentially cause rifts with people you like, even if the one in the wrong isn't your favorite person in the world.

Count you blessings and then take the check when it comes.
posted by plaidrabbit at 7:19 PM on March 16, 2008

Might as well do the audit, assuming that there's no risk. But from what you said, it doesn't sound like there is any clear evidence that you're being screwed. It isn't up to you to determine how much your relative ought to have spent on living expenses, nor does it make sense to sell a higher valued (and consistently so) stock just to maintain a balanced portfolio.

Also, maybe your relative intended to sell off Company #1 all along, in order to live, and maintain his/her position in Company #2. After all, he/she did decide to will Company #2 stock to people that were apparently closer to him/her (assuming power of attorney was granted to a son/daughter/brother/sister, in any case somebody that seems to have been devoting a lot more time to this relative than you).

If the audit doesn't provide conclusive proof of malfeasance, you really should walk away.

Instead of asking a vague question here, you should talk to a lawyer that specializes in this sort of thing. You didn't provide much information in this post, but you do sound a bit like someone that's suffering from a touch of greed and envy. These things can easily make bad decisions seem like good decisions.
posted by paperzach at 7:23 PM on March 16, 2008

I'm curious as to what is supposed to have happened. I mean, unless there was something in the POA directives that said so, the now-executor didn't have any fiduciary duty to you until he became executor upon your relative's death, did he? I mean, I understand that you can't use a POA for self-aggrandizement, but does that really stretch as far as paying legitimate costs with one asset before another, unless you can demonstrate that it harmed your relative's interests -- not your interests, your relative's interests -- to sell off that stock first, and did so in such a clear way that no reasonable person managing someone else's affairs would ever sell off Stock 1 first?

If the POA-holder was spending that money not on himself and not on your relative's care and upkeep, that's a different story.

If there was any sort of long-term care for your relative, my first guess, frankly, is that you and the people close to you are just out of touch about what long-term care, especially skilled care, costs. $10,000 a month wouldn't be *crazy* for skilled care in a better facility in an expensive state.
posted by ROU_Xenophobe at 7:29 PM on March 16, 2008

Lawyer up.
posted by zardoz at 7:34 PM on March 16, 2008

I'm no lawyer. But when I read this, the issue seems to be the executor violated a fudiciary duty -- he was managing the relative's assets in his own best interests rather than the relative's (in which case the sell-offs ought have been done pari passu).

So why do you need to contest the will at all? Won't this case be about suing the executor for his years of embezzlement rather than the terms of the will? Why on earth do you have to risk getting only $1? (I realize OP can't respond, so I guess this is a question for any lawyers reading)
posted by FuManchu at 7:42 PM on March 16, 2008

Lawyering up, yes indeedy, even just to consult. It may be worth it to pay the $$$ to meet with an estate attorney just to know where you stand. Here's a related thread from a while back that may have some useful info too.
posted by moonbird at 7:45 PM on March 16, 2008

If this question is anonymous, why not give the value of X? Because answers might be different for values of $1,000,000 and $10,000.
posted by Kwantsar at 7:51 PM on March 16, 2008 [1 favorite has favorites]

bird in hand!
posted by lockestockbarrel at 7:57 PM on March 16, 2008

Agreeing that the numbers here are significant. For $10,000, not worth it. If were talking anything higher than hundreds of thousands of dollars, it starts to become worth it.

Does requesting an independent audit violate the no-contest terms?

What about the externalities? Who loses if you win? What do you lose in family relations if you win? After all the costs, I kind of doubt it will be worth it
posted by gjc at 8:14 PM on March 16, 2008

It took me a while to parse your question, and I thought I would summarize here:

- deceased relative owned equal shares in Company X and Company Y 20 years ago.
- executor relative had power of attorney to manage the deceased relative's money
- executor relative was to receive shares in Company X in will
- executor relative is suspected of selling off shares in Company Y and buying shares in Company X to increase their take

And now, here's my opinion.

This will, I suspect, be an easy case to prove. There were stocks, there were stock sales, all presumably documented, and the executor clearly benefited from the actions.

The executor, acting under power of attorney, could have sold shares in Company Y and put them into company Z or cash or bonds, preserving your interest. Instead, they purchased shares in Company X, a move guaranteed to benefit them under the terms of the will.

I'd talk to a lawyer about proposing a settlement with the executor. You're not challenging the will, you're challenging their action as an executor and as someone with power of attorney, acting in what would appear to be their own selfish interest.
posted by zippy at 8:40 PM on March 16, 2008

You're only seeming to focus on the money numbers here. I think you might want to look at other factors, which are arguably as important if not more so.

What is your relationship to the executor? Why did your relative put in the "don't contest the will" clause -- was it his or her sincere desire to preserve family peace, or is this just a standard clause? Does the executor generally operate somewhat improperly, so that by more closely examining this you might be helping others?

Please don't be distracted from "real life" concerns by suddenly having this much money; if nothing else, you don't want your life to suddenly resemble a cheesy 70's comedy.
posted by amtho at 8:45 PM on March 16, 2008

Do the audit, assuming that doesn't fall under "contesting the will". Then talk to lawyers and accountants experienced in the area.
posted by schroedinger at 8:52 PM on March 16, 2008

3 Steps.

Lawyer.

Financial Audit.

If the first two are favorable to you, lawsuit/settlement.
posted by BobbyDigital at 8:56 PM on March 16, 2008

Get a lawyer first. Do the audit second. Then, and only then, make a decision. Do not ask MetaFilter: although responders are intelligent, they are not expert. Listen to a lawyer you trust.

Also, as plaidrabbit said above, don't stir the shit unless you're willing to get dirty. Recognize that if you lose, you'll lose a lot more than money. If you win, that's all you've won.
posted by Picklegnome at 9:12 PM on March 16, 2008

- executor relative is suspected of selling off shares in Company Y and buying shares in Company X to increase their take

I don't get this from the description. All I get is that shares in Company Y were sold off and shares in Company X weren't.

This will, I suspect, be an easy case to prove. There were stocks, there were stock sales, all presumably documented, and the executor clearly benefited from the actions.

Wouldn't it also have to be shown that the sales as conducted were not a reasonable strategy for maintaining your relative over the longest time, or otherwise that the agent was acting with disregard to the relative's interests?

The executor, acting under power of attorney, could have sold shares in Company Y and put them into company Z or cash or bonds, preserving your interest.

But, from the description, this wasn't as executor of the will, it was as attorney-in-fact for the relative while the relative was alive. At that time, did anonymous's interests enter into the picture at all?
posted by ROU_Xenophobe at 9:25 PM on March 16, 2008

I don't get this from the description. All I get is that shares in Company Y were sold off and shares in Company X weren't.

In looking at the description again, Company Y shares were sold off, and there is an imbalance between Company X and Company Y. There is no mention of the purchase of additional shares in Company X (which would benefit the executor).

However, the question then becomes - if company Y shares were sold off, what became of the money? Did it go to the executor (in the form of a purchase of company X, or otherwise?).

But, from the description, this wasn't as executor of the will, it was as attorney-in-fact for the relative while the relative was alive. At that time, did anonymous's interests enter into the picture at all?

The attorney-in-fact knew that they were in the will, and also that the will only granted them shares in Company X. Did they act in the now-deceased relative's interests, or in their own, in presumably selling off company Y. Where did the money from that sale go?

I should note that there are other ways, legitimate ones, in which equal shares in Company X and Company Y can change over time. For instance, there could have been a split in one of the stocks, or the deceased relative could have opted for a dividend reinvestment program in one or both stocks, which would likely result in the proportions of the stocks relative to one another changing over the span of two decades.
posted by zippy at 9:46 PM on March 16, 2008

Zippy's got it. Lawyer. Audit. Brokered agreement with the thieving party for a percentage - ANY percentage - of their share. If no deal can be brokered, take your stock and run.

Having been through a large estate will contest where I did, in fact, walk away with what basically amounted to $1 after attorney fees, I cannot urge you enough not to put the entire value of this inheritance at risk. Even if you didn't expect this money, looking forward to it, making plans for it, and then having nothing at all is a bitter, bitter pill to swallow. It has the potential to change you - and not for the better - more than the money ever will.
posted by DarlingBri at 12:06 AM on March 17, 2008

I am confused on why anyone thinks you might have a case. The duty of the person with power of attorney was to the person who owned the money -- not to you. Unless there is evidence that selling the shares in X was to their disadvantage while they were alive, where is any law suit? At best, if blatant theft occurred, you could stir up enough mud for a criminal prosecution. But any theft still would not have been from you.
posted by Idcoytco at 2:13 AM on March 17, 2008

The lawyers barbers I've talked to have all said it smells fishy and think there's a case here I need a haircut.

Please bear this in mind when you're making your decision. If the sums in dispute are large, the potential contingency fee will be large. If you lose, you're out $X. The lawyer is out whatever his time costs. Again, if the sum is large, you are not making the same stake in the gamble. This risk/reward ratio will factor into the lawyers' assessment of 'worthwhile to pursue' and should factor in your assessment of their advice.
posted by Jakey at 3:42 AM on March 17, 2008

The X in your hand is worth 3 in the bush.

Pursuing the 3X won't leave you with 3X. At best, it will leave you with 3X minus lawyer's fees minus time plus your wife's irritation plus any bad family karma that may accrue. At worst it will leave you with $1 minus lawyer's fees plus wife's irritation plus bad family karma.

X leaves you debt-free with a nest egg, a happy wife, no family issues, and some curiosity about what could have been.
posted by heatherann at 6:31 AM on March 17, 2008

I was thinking about this today, and would have emailed you, poster, if this wasn't anonymous - but I had a thought I think you're missing.

If things are as you say they are, you're actually never going to be contesting the will. Sure, you're bringing an action of breach of fiduciary duty against the guardian/attorney-in-fact, which sounds fairly good - but at no point are you actually contesting the will. You're still going by the terms of the will (you get X number of shares of stock which = $X) - but the other part is going to come from the person guilty of malfeasance; at no time - win, lose, or draw - will you ever actually contest the will, so you won't ever activate the $1 clause.

What you're alleging is that the person who's job it was to oversee things did not execute their duty properly, and is thus personally liable for the difference in cash. While it appears that the source of those funds will be from the sizable inheritance this person will recieve, that has absolutely nothing to do with the will. When the relative dies, the will will execute as planned - pushing all that money into the hands of the guardian. Assuming you've secured a judgement against the person, that money will then be transferred to you...and at no time will you have ever quesitoned the will.

Hope you're still reading - run it past your attorney, but it looks like this is the case from the facts you've told us.
posted by plaidrabbit at 1:39 PM on March 17, 2008

OK, re-re-reading the original post, here are the facts as I understand them now:

- deceased relative owned equal shares in Company X and Company Y 20 years ago.
- executor relative had power of attorney to manage the deceased relative's money
- executor relative was to receive shares in Company X in will
- executor relative preferentially sold off Company Y shares for now-deceased relative's benefit
- OP alleges that executor did not also sell of shares in Company X in order to benefit self

The question now becomes, did the attorney-in-fact act in the relative's interests, or in their own interests, in choosing which stocks to sell. It would seem that there was a potential conflict of interest in this decision. If so, why did the attorney-in-fact continue in the face of this rather than find someone to act in this matter who did not have a conflict of interest?
posted by zippy at 1:45 PM on March 17, 2008

I agree 100% with what Idcoytco posted above.

In your original post, you said: If I contest this, though, there's a clause in the will that cuts my inheritance to $1.

I must be missing something here, because it sounds to me like the will comes with instructions and you will inherit a large sum if you follow them. Follow them, and be thankful that someone else's money is being given to you. Don't let greed for more cloud your judgement.

That's just my $o.o2, which is worth only 98 cents less that what you could end up with.
posted by 2oh1 at 11:15 PM on March 17, 2008

Trust in karma. You're getting a gift, and the gift-giver didn't want anyone to start the lawsuit game, so take you cut and enjoy the gift. Legal cases like this can take a long time and be very emotionally draining, whether or not you win.
posted by lubujackson at 8:26 AM on March 18, 2008