@Opus 17 wrote:
....Instead, you were the sole heir......
@QuestionFromMe was not the sole heir with respect to the JTWROS account per the will because the account passed to @QuestionFromMe by operation of law (outside of the estate).
Any terms of the will to the contrary with respect to the JTWROS account would have no effect; the account would pass to @QuestionFromMe automatically.
Apparently, the nature of the account (the survivorship component) was the target of the claim initiated by a potential heir (named in the will or otherwise). If the claim had been filed in probate court, then the costs and attorneys' fees would be deductible on an estate income tax return (or an estate tax return, 706, in the unlikely event one were being filed).
@Opus 17 wrote:
It's just a gift (possibly) or a personal legal settlement (possibly).......
The payment can't possible be considered a gift since there was no donative intent; the settlement payment was the result of @QuestionFromMe trying to avoid further time and expense in defending a claim against either him personally or the estate.
Again, @QuestionFromMe should consult the attorney who drafted the settlement agreement (or by whom the estate was represented in court) to determine whether any personal funds expended should have been taken and distributed, on a pro rata basis, from the assets of the estate.
