My late father's estate was awarded $50K. My brother, as executor, kept the money. What can we do?

By Quentin Fottrell

'My brother retains the money awarded to my father to this day. My mom is still alive.'

"In New York state, shouldn't the money be transferred over to my mom, since she was the sole heir in his will?" (Photo subject is a model.)

Dear Quentin,

My pop passed away in 2000. His estate was awarded $50,000 in a class-action lawsuit over his cause of death. My brother was the executor of his estate. My brother retains the money awarded to my father to this day. My mom is still alive. In New York state, shouldn't the money be transferred over to my mom, since she was the sole heir in his will?

Living in SoHo

Don't miss: I have early Alzheimer's and my husband has stage 4 kidney disease. We just inherited $50K. How can this help us?

In New York, the statute of limitations to take legal action depends on the alleged crime.

Dear Other,

South of Houston, you have a problem.

If there was a will that named your mother as sole heir, all money from the lawsuit should have gone to her. Your brother was not legally allowed to keep this money for himself without her consent. In New York, the statute of limitations for criminal fraud and embezzlement is generally five years for felonies and two years for misdemeanors. The statute of limitations for the breach of fiduciary duty is anywhere from three to five years.

The statute of limitations to take legal action depends on the crime. There is no statute of limitations in New York for a Class A felony, which includes murder, rape, treason and first-degree arson. Legal malpractice is three years, theft is two to five years, and medical malpractice is two years and six months from the date of the alleged offense or from the end of treatment taken by the medical practitioner. Read more here.

An attorney could outline your options, but because this happened 25 years ago, your options are extremely constrained due to the statute of limitations. Assuming your mother is aware of this situation and feels as you do, she could simply reduce your brother's inheritance; that is a practical and voluntary solution, not a legal one. That would save thousands of dollars in lawyer's fees, save you time and stress and, ultimately, save your mother additional heartache.

How much should she reduce his inheritance by? Inflation alone would mean that $50,000 would be worth more than $93,000 in today's money. And if it had been invested, assuming a very conservative 1.5% interest rate, that would bring an extra $21,000 or more to the table. So in order to pay the full penalty for your brother holding onto this money for 25 years, she could deduct $115,000 from his inheritance.

An executor has a fiduciary responsibility to honestly deal with all aspects of the deceased's estate, including paying creditors and taxes and distributing assets to heirs. They absolutely must avoid self-dealing and acting in their own interest. The legal heir in this case would be your mother, unless your father had a will stating otherwise. The executor has a fiduciary duty to act in the best interests of the estate and the estate's beneficiaries, avoid self-dealing, and must distribute assets according to the will, and keep accurate records of the estate.

Ordinarily, you would be able to sue and/or remove an executor who acted improperly. "Yes, you can sue the executor of an estate," says Matthew A. Bourque, an attorney practicing in Dallas and Houston. "Interested parties have the right to sue if the executor has breached one or more fiduciary duties to the estate and its beneficiaries. However, there are some limitations to this. Before you sue the executor of an estate, you must consider whether you have standing to do so."

Not everyone can sue an executor

"It is important to distinguish lawsuits against executors from similar types of claims," he adds. "Lawsuits against executors typically allege that the executor breached a fiduciary duty. This is different from a will contest, which challenges the validity of the will itself. Lawsuits against executors are also distinct from removal actions, in which a beneficiary asks the probate court to force an executor to step down."

Looking ahead, I would obviously advise your mother against naming your brother as executor of her estate, given his track record. She could - and probably should - appoint an independent third party to avert any further conflict. Meanwhile, someone who does not have any children, or does not have children who they trust, can consult with the National Academy of Elder Law Attorneys and the National Association of Estate Planners & Councils.

No amount of money will likely ever be able to compensate your mother for that loss 25 years ago.

Related: I'm administrator of my sister's estate. Her bank won't tell me the names of her beneficiaries. Is that legal?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

The Moneyist regrets he cannot reply to questions individually.

More columns from Quentin Fottrell:

I met a friend for lunch. When the check arrived, she said, 'Thank you so much for paying!' Was I taken for a fool?

'She has been telling him lies': My sister convinced my father to sign everything over to her. What can I do?

My father died, leaving everything to my 90-year-old stepmother. Do I have a right to ask her if I'm in her will?

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-Quentin Fottrell

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