I have been asked to sign a receipt and release after receiving an inheritance.
What is a receipt and release? What is its legal effect?
Answer
This material is quoted from 7 Warren's Heaton on Surrogate's Court Practice § 94.02. This material and other materials are available in public access law libraries.
"Parties may agree to settle an estate without a court proceeding. Such an agreement constitutes a contract.
"The general procedure on an informal accounting is for the fiduciary to prepare an account, together with a receipt and release for each person receiving property from the estate, and an agreement settling the account. These documents are then sent to all parties who would be necessary parties to a judicial accounting. It is the duty of the fiduciary to obtain a receipt and release from each person to whom the fiduciary makes a payment or delivers property from the estate. The receipt and release serves two purposes: (1) it serves as proof that the person to whom payment has been made or property delivered has in fact received the payment or property to which he or she was entitled; and (2) it releases the fiduciary from further liability to the person receiving the payment or property. If all parties sign the agreement, the fiduciary may distribute the estate pursuant to the parties’ agreement and close the estate. If the language of the release is sufficiently broad, it may release the fiduciary not only from known claims, but also from unknown claims that could have been made at or prior to the date of the execution of the stipulation of settlement and general release. ….
"Although there is no statute that specifically permits the settlement of an estate of a decedent by agreement, this method of settling estates is well recognized. Stipulations of settlement are looked upon with favor by the courts. Parties of full age may arrange, settle and distribute an estate in which they are interested among themselves without any formal decree of the court, and such settlement and arrangement, in the absence of fraud, undue advantage, overreaching, collusion or mistake, is binding. The same rule applies when a party seeks to set aside a receipt and release. The validity of a release is not contingent upon whether a beneficiary was represented by counsel."