If your father survived your grandfather by the period of time established by the state your grandfather lived in when he died, then your father inherited the money. When your father died, the money would be an asset of his estate and distributed according to his will or the intestacy laws of the state he resided in. It sounds like your father owed your mother child support and she filed a claim on his estate for the sum outstanding. Claims against the estate have priority over gifts to heirs/beneficiaries. That is, they must be paid first and whatever is left over is given to whoever is entitled to inherit. The state, however, may have a claim against the money that went to your mother as the state paid for much of your upbringing in foster homes & treatment centers and will want to be reimbursed. However, if your step-father paid for some of those costs, that would reduce the amount the state could recover. If your father didn't meet that criteria, then the money would go back into your grandfather's estate and distributed either according to the terms of his will or intestacy laws.
Answered on Mar 21st, 2013 at 9:26 PM