Who is liable regarding an overpay of estate assets?

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Who is liable regarding an overpay of estate assets?

A bank was designated as executor of my father’s estate.My sister owed him $35,000 on a promissory note. Then 4 years ago a disbursment was made to all the siblings but her; she received a letter and note stating she was paid in full and would be treated equally. They are just closing out the estate and state that they made a $17,000 error, so she owes them. They disbursed another $90,000 after this satisfaction. They are just closing out the estate, she lost her job, house and savings due to cancer and can’t pay them back. The bank executor says all funds for suing her will come out of our remaining funds and if we file an objection in orphan’s court for a full accounting and failure of fuduciary responsibility we have to pay their attorney fees?

Asked on October 15, 2012 under Estate Planning, South Carolina

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I am so sorry for your loss and for the problems that have ensued.  Generally speaking, if a fiduciary (here the executor bank) is sued by the distributees of the estate (heirs, beneficiaries) then the executor can use the estate proceeds to defend him or herself in the action.  So it does deter bringing an action because it can deplete estate funds.  Of course if you are successful then you have a means to get them back: the bank I assume posted a bond.  It may be advisable to speak with an attorney who is familiar with estate litigation and see if 1): you can you force an accounting and 2): can strike up a deal to negotiate a settlement with the bank.   They do not want bad press about their breach of duties and mistake and their attack on a Cancer victim.  You have a lot in your corner here.  Good luck. 


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