Legal Question in Wills and Trusts in Pennsylvania

The heirs have no right to keep the assets and NOT pay creditors. If disbursement was made wrongly, while unfortunate, the money should be returned. I don't know where the estate is pending so I don't know if you can be compelled to return the funds. If that occurs, then you might be charged for any legal expenses occasioned by your refusal to return the money. If you do not, then the executor is going to be personally liable for the loss.

I cannot tell you who screwed up and I cannot leap to the assumption that it was the law firm. Medicaid offices are notoriously S-L-O-W in making claims. It may be that it was felt by all that there would not be an issue if disbursements were made. However, it illustrates the danger for all executors - they cannot make disbursements of any money until ALL claims are paid.

If it was the law firm, this is between the executor and the law firm he or she hired.

Since this is Ohio Medicaid, I assume the estate is in Ohio and you might be better off consulting an Ohio probate attorney. If the estate is in Ohio, Ohio laws apply, not PA laws.