Legal Question in Wills and Trusts in New Jersey
Refunding Bond and Release
After my father passed away the executor (who is also a beneficiary) and myself entered into negotiations over various pieces of property. At the time of negotiation, the executor told me that mortgages my father held on two pieces of property (they were part of the negotiation) were waived upon his death. These two pieces of property were part of a S orp. which my father had a 50% interest in. We agreed on a settlement and a Memorandum of Agreement was signed along with a Refunding Bond and Release. The IRS has done an audit and determined that the mortgages are part of my father's estate and that the estate owes back taxes, interest and penalties. What is my course of action against the executor? Can the fact that the executor mislead me at the time of negotiation void the Refunding Bond and Release? Does the executors bad information about the mortgages brech our negotiation and Memorandum of Agreement?
2 Answers from Attorneys
Re: Refunding Bond and Release
Clearly, you understand that your questions, which are legitimate and involve decent amounts of money and legal work, are NOT going to be answered and solved by my response. No attorney can solve your issues through this bulletin board.
You clearly need to get advice from an attorney who handles estates, and who also goes to court and litigates.
The issues with your father 'waiving' the mortgages on his death are...very troublesome. It may in fact have been quite true, but you absolutely should have had an attorney to advise you. And now that IRS is pursuing the Estate, the executor has caused some other issues. Those issues might have been unavoidable, or maybe not.
Please get advice from an estates and trusts attorney who also goes to court regularly, who is located not too far from you.
Disclaimer: Your question and any response does NOT create an attorney-client relationship between you and this law firm. You can not rely on the statements made by an attorney given over the internet. The response that you have received is based only on the small amount of information which you have provided. The exact facts of your situation, including facts which you have not mentioned in your question, may completely change the result for your situation.
Re: Refunding Bond and Release
I agree with Bob that this is a complicated problem and I am not sure of the exact facts. As I read your question, your father was a creditor and the executor claims there is some basis for his or his estate not receiving payment upon his death, and IRS is now claiming that the value of these mortgages should be added to his estate value, producing taxes or increased taxes. More information than what you provided is required, but it seems that litigation is inevitable and may include litigation against the executor, in his capacity as executor, and, maybe, personally. Included in the additional information needed are the details of the agreement and the language of the Release and Refunding Bond, plus whatever verification, if any, you have that shows the mortgages were waived.
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