The family of a successful Minnesota businessman have agreed to settle a lawsuit against his former accountant. The businessman who owned Woodcraft Industries died in 2011 and was in poor health for many years prior to his death. The accountant was supposed to administer his estate, but the lawsuit that was filed in 2012 claims that the money disappeared.
During sworn testimony, the accountant said that he had been gifted $6 million by his client from the sale of Woodcraft Industries. However, he was not able to provide any proof that this was the case. Reports indicate that the money was supposed to be donated to the Central Minnesota Community Foundation, which provides assistance for youth in St. Cloud. According to the agreement, the former accountant will be able to keep certain assets and will cooperate in a process that aims to recover more of the missing assets.
A $2 million confession of judgment was also agreed to but not filed with the court. However, this will be filed if the accountant does not fulfill the terms of the agreement. The agreement was designed in part to give the estate and the Community Foundation some assurance that the former accountant would not file for bankruptcy.
Those who are given the role of administering an individual’s estate must abide by state law and the terms of the trust. If money is gifted or otherwise paid to an accountant for any services rendered, it may be worthwhile to put the terms of the deal in writing. This may offer protection for both parties involved in the deal. A business law attorney may be able to help draw up those documents to ensure that the transaction is as transparent as possible.
Source: SC Times, “Ritsche family approaches settlement with ex-accountant“, Kirsti Marohn, September 15, 2014
This information is general in nature and should not be construed as tax or legal advice.