Holding the Money Hostage
August 10, 2017 § 2 Comments
What do you think is the natural result of an estate with no money, no real property, and no contingent claims? If you guessed that the heirs and beneficiaries totally lose interest and it becomes devilishly difficult to get anyone to sign and return pleadings, joinders, etc., then you’re right.
So what would you predict the result would be if you disburse all (or most) of the money to the heirs or beneficiaries before the estate is closed? Again, if you guessed that the heirs and beneficiaries totally lose interest and it becomes devilishly difficult to get anyone to sign and return pleadings, joinders, etc., then you’re right.
Yet, lawyers yield too often to pressure from the heirs and beneficiaries to get them their money now. In those cases, the lawyer always projects optimism that all will turn out well, that these are the most cooperative people he has ever dealt with, that they sure could use their money now, that they are really putting the heat on him, and blah, blah, blah. Then, a couple of years later he sits with flushed face before the judge complaining that he can’t get the fiduciary to sign the petition to close the estate, and he doesn’t even know now where are all the heirs and beneficiaries.
In a case before me, the lawyer optimistically disbursed all the cash. The remaining asset was a late-model Cadillac, which was ordered to be sold and the proceeds divided eight ways. Two years later, the car is not yet sold, the heirs have melted with their moolah into the woodwork, and now the lawyer’s calls, letters, and pleas to sign a petition to close go unanswered. And why should they bother? A one-eighth share of the car proceeds won’t be much. They already each got more than $40,000.
I say the result would have been far different if the lawyer had gotten an order from me refusing to disburse any funds until the matter was concluded. Money is an amazingly effective motivator. As long as you control it, you control the people who are supposed to wind up with it. When you lose control over the money, you lose control over the people who have gotten it. It’s that simple.
Learned Chancellor Primeaux –
So, so, true…..an excellent practice
tip and a very good reminder for
I agree with all said in your post, however, what do you do when the executors and trustee admit to not being neutral and churn millions in “administrative” fees, to force 50% of the heirs to settle for not what was left to them in the Will?