Ask Terry Questions Can I be required to repay a gift through a will?

Can I be required to repay a gift through a will?

By Terry Savage on January 14, 2016 | Wild Card

I went through a very turbulent divorce, with children, in 1998. My parents knew I did not have the means to pay any attorneys to fight for my children – a separate issue. They agreed to pay my attorney fees. They also filed for grandparent visitation. All of this was done with the best of intentions from loving parents who cared and I am very grateful.

However, my father passed away in 2003. My mother just passed away in November of 2015. Upon her death, my sister (executrix of moms estate) presented me with a will that 1. Requires that these legal fees come out of my inheritance and 2. That if any child contests any part of the will, they will be bequeathed $1 only.

So – Now I’m looking at being forced to repay what I thought was a gift, and if I don’t like it, (by way of litigation), I get $1. There was never any written or verbal contract for repayment of these fees.

They had loaned me money for other things – property – a cash loan – for which contracts were written, it was clearly understood by both parties that I would repay these.

These are not small amounts. My legal fees, which I have no way to determine, are being calculated by my sister now. 13 years have passed without anyone telling me I had to repay these legal fees. I would imagine the fees could be in excess of 150,000, which would effectively bankrupt me. Further, my siblings were given all kinds of gifts, property and cash, without requirement for repayment. Only my repayment clause exists in the will.

How can a will become an instrument of a contract that never existed? I’m very grateful to my parents for their help, and they had the means. The rest of my siblings will inherit close to 400,000 each.

Now I’m being told I have to repay a debt that I considered a gift, and I didn’t know it was anything short of a gift until after both parents passed and I learned there was a will. Am I on the hook for these legal fees?

Terry Says:  Calm down.  You are only “on the hook” for actual promissory notes that you signed acknowledging an obligation to repay.  And since you signed those notes, you still have the obligation to pay them to the estate.  But any gifts or advances, including legal fees for your divorce,  are not repayable unless you signed a note for that amount.

Let’s take this from your parents’ viewpoint.  They were probably trying to divide their estate fairly between you and your brothers and sisters.  To do that, they had to recognize that they had advanced you considerable sums of money.  And they would typically instruct the executor — your sister — to subtract those amounts before distributing the balance.  In fact, your parents were wise to specifically note that those advances for legal fees  come out of your share of the estate, so there would be no quibbling about the issue.  They should also have mentioned this to you at the time.

What is left to determine is the amount of the actual advances vs. the amount you would have received from your share of the estate. There are three possibilities. First, there could be a small amount of inheritance left over for you, beyond the subtraction for the legal fees.  Second,  it could work out evenly:  after subtracting the legal fees, you get nothing.  Third, your share of the estate was smaller than the legal fees, and there is a “balance.”   But the hand cannot reach from the grave and demand that you pay the balance back to the estate — absent a note!  (And likely, that’s not what your parents intended.)

The one issue here that could cause an argument is your sister’s tally of these legal fees.  I assume she has access to their checking accounts, or that they left records of the amounts they paid on your behalf. If you think your sister is not calculating accurately, then you could challenge her math.  That is NOT the same as challenging the terms of the will.  This is a tough job for the sister who is the executor.   Your parents were obviously trying to be fair to all their children.  But they left the task of breaking the news, and managing the distributions, to her.  So give her the benefit of the doubt.

However, if she comes after you to pay back anything to the estate,  beyond the notes you signed, then you will need a lawyer to defend her claim.  I haven’t seen the documents, and I am not an attorney.  I’m just giving you basic precedents of law.  This is surely the last thing your parents wanted — so keep that in mind.  And to verify that you might want to schedule a meeting with the attorney who prepared the will.  (Remember, he will be representing the estate — not any of the beneficiaries.)  If you do need your own attorney, be sure to consult one who specializes in estate law.



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