Over My Dead Body: Pay Back Your Inheritance

pay back your inheritanceWhat if you had to pay back your inheritance?  Sounds crazy, right?  Well, not so fast.

Recently, I came across a personal representative who completed an informal probate process on their own through the probate process in Hennepin County.  The person that died was their parent.

During the this process, no will was found and the probate court divided the estate into three parts:  50% to the personal representative, 25% to a niece and 25% to a nephew.

Unfortunately, a will was found AFTER the estate was closed.  Even worse, the will stated the personal representative (the parent’s child) should receive 100% of the estate, which was different than what had been previously provided.  Now what?

Luckily, there are rules and laws in place to help facilitate this problem.

Laws to pay back your inheritance

In Minnesota, rule 524.3-1006 limits an ability to force or make another person pay back your inheritance if it has been more than one year after the estate was distributed or three years after the decedent’s death, which ever is “later”.

This means Minnesota probate laws support not returning an inheritance if it was incorrectly paid only if the time periods have expired.

Pay back your inheritance – exceptions

On the other hand, a beneficiary might be compelled to pay back your inheritance for the following reasons:

  • You are within the three year time limit, or
  • A beneficiary engaged in fraud.

Balance the value of your inheritance

Another element I believe is very significant is the balance of relationships.  In other words, should the personal representative re-open the estate to “take” more money?

In the above example, the personal representative was excited about finding their parent’s will because it meant their inheritance should have been $5,000 more.  inheritanceIs an extra $5,000 worth engaging a lawyer, re-opening a probate case and using procedure to make beneficiaries pay back your inheritance worth it?

Would your answer change if the gift increased to $10,000 or $50,000?

Yes, these are difficult questions to answer and the dynamic of your family is a critical piece to consider.  In my opinion, there are multiple factors to consider, which makes every probate different.

Do you need to pay back your inheritance?

Please contact this law office if you need help with determining if you should pay back your inheritance.