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Can an executor withhold money from a beneficiary and what can be done

can an executor withhold money from a beneficiary

Can an executor withhold money from a beneficiary? While the majority of executors and administrators handle probate timely and adequately, there are times where an executor withholds money or property from a beneficiary. There are steps that you can take to hurry the executor along and protect your interest in an estate. You are entitled to a full accounting of the estate’s assets and to the timely distribution of the estate’s money and other assets.

Through compelling an executor to provide a full accounting and fulfill the bequests in the will, a New York estate attorney can help a beneficiary protect their rights.

The seven-month waiting period

Just because you are waiting doesn’t mean that the executor is withholding money – they may be doing other things.

Under most circumstances, a beneficiary does not receive their inheritance right away. There is a waiting period. According to New York law, creditors have seven months to claim what is owed by the estate. This time limitation creates an idea of how long it will take to get your inheritance. It may be that the executor is not withholding money from a beneficiary, he is simply waiting out the required period.

Litigation delays

If there is litigation involved, then there could be a more extended period going by before you can collect the money from your inheritance. Different types of litigation can affect an estate.

  • A medical malpractice claim
  • A business dispute
  • Real estate eviction
  • The validity of the decedent’s will
  • The qualification of the executor

Litigation can add years to an estate proceeding and may give an impression that the executor is withholding money from a beneficiary.

Delays in marshaling assets

Before the executor can distribute money, the executor has to find the money first. If the decedent did not leave a detailed list of the assets in the estate, then the executor will have to perform multiple searches:

  • Look through the decedent’s documents
  • Find decedent’s safe deposit boxes
  • Search for real estate
  • Search for other assets

As long as the executor is performing their duties, they are not withholding money from a beneficiary, even if they are not yet ready to distribute the assets.

If the executor actually withholds money from a beneficiary

Once seven months have passed, and the executor is still not releasing money or property left by the estate, then the executor may actually be withholding money from a beneficiary.

A minority of executors go as far as to steal from the estate and mismanage the estate and then attempt to cover up their misdeeds by not communicating with the a beneficiary. There is recourse against an executor who violates his duty to the estate. The recourse involves court intervention. A beneficiary can bring a proceeding to have the judge of the Surrogate’s Court compel the executor to file an account of the estate.

Estate accounting

If we feel that the executor is withholding money, we would first file a petition or an accounting of an estate, to get an idea of what the executor is claiming is left for distribution. If there are disagreements over what is in the estate, we resolve those disagreements before moving on to the distribution stage.

If ordered to submit an accounting, the executor will have to submit the accounting to the court, usually within thirty to sixty days.

An accounting is a set of schedules that include all possible information about the estate, such as

  • an itemized list of the assets that are in the estate
  • the funds or property received by the estate
  • the expenses of the estate
  • the beneficiary distributions already disbursed and
  • the beneficiary distributions yet to be disbursed

A beneficiary and their estate attorney can review the schedules and decide that they are satisfied with the information. Or, they can compel the executor to provide all of the documents associated with the estate as well as the executor’s personal documents. A beneficiary is entitled to documentation, such as

  • account statements
  • closing statements
  • copies of checks
  • tax returns
  • loan applications

Proceeding to compel executor to stop withholding money from a beneficiary

If the accounting is resolved and the executor is still not distributing money to a beneficiary of the estate, we then go to the next step. We would file a petition to compel a distribution, to ask the court to force the executor to stop withholding money from a beneficiary and to release the inheritance. This law is meant to protect beneficiaries from an executor who either is lax in handling their duties or is purposefully refusing to distribute the inheritance. The law lets you ask the court through a New York estate attorney to force the executor to turn over property that you are entitled to.

If you would like to know more about your options when the executor is withholding money from a beneficiary, we at the Law Offices of Albert Goodwin are here for you. You can call us at 718-509-9774 or send us an email at attorneyalbertgoodwin@gmail.com.