It's painfully common among people who've been poor and suddenly become rich (lottery winners, unexpected inheritence, etc) to spend themselves into bankruptcy within a few years, largely because they're inexperienced with large sums of money and feel like they couldn't possibly spend it all. The strange clause in the will forces Brewster to learn, by experience, how quickly one can blow a fortune, which will probably make him much more prudent with his real inheritance. The old guy was actually pretty clever.
The whole point of the movie is that Brewster has serious trouble actually trying to pull that off since, being a rather down-to-earth guy, he really doesn't want that much. Even at the end of things, down to the wire, he still has $20,000 left that he couldn't get rid of. Money that he could probably live quite comfortably on for a while with his modest lifestyle.
Although he did only have that $20,000 due to the double-dealing of someone who was trying to rip him off by sabotaging the bet.
Which is why he effectively threw it away, since he had done all that work for practically nothing. If he HAD lost, he'd likely end up losing a lot of trust with his new friends, for being so callous with money. When he walked back into their lives and effectively said they were still getting paid...
Monty was in the dark about having white relatives through Rupert's father. But it's likely Rupert's father deliberately suppressed that information since interracial relationships were taboo and scandalous in the early 20th century.
Rupert's Consolation Prize, giving Monty $1 million to back out, makes sense. While Rupert may dislike Monty, inheritance laws mean that Monty could be entitled to some of Rupert's estate. Rupert giving Monty some kind of cash would prevent his estate, challenge or not challenge, from being tied up in litigation.
Fridge Logic
The entire happy ending of the movie hinges on the fact that Monty technically cheated. To wit:
The will explicitly states that he can "hire" anyone he chooses, in whatever capacity he wishes, but he "must get value for their services."
When Monty punches the cheating lawyer at the climax and is threatened with a law suit, he hires his accountant to act as an attorney, telling her she can earn a law degree with the $20,000 he's paying her. She writes a receipt and the money is considered spent, she's now a lawyer on retainer.
Here's the thing: she's not a lawyer yet. She can't really act in any official legal capacity on Monty's behalf, and the jerk cheating guy isn't likely to postpone his lawsuit (assuming he has the nads to go through with it, natch) until she finishes law school. In other words, Monty is not getting "value" for her "services".
But, the agreed-upon Rules Lawyer accepted the receipt, so technically, the will's stipulation was fulfilled. Monty had to spend the inheritance within the 30 days. Whether he received any refunds or other returns after the deadline was never mentioned. Just not have it at the last bell toll.
She can act as a paralegal for any attorney and Monty, like every other citizen, is allowed to be his own attorney.
Although she's still a student, he can still pay her for the benefit of her legal advice, which is still likely to be more informed that his lack of knowledge of the law. Lawyers often charge consulting fees as well.
Also, neither of them specified how long a period the retainer covered. Once the Rules Lawyer accepts that he can purchase her future services to settle the junior partner's lawsuit, it's entirely within his rights to declare that $20,000 is a fair retainer to hire her legal services for the next twenty years at a thousand bucks a year.
Literally speaking, the Rules Lawyer simply accepted the "cheat" because, in all honesty, the law firm had cheated WORSE, so he only accepted that Monty had won because, shortly after Monty left the room, he'd be taking the other men in the room aside for a very long talk, involving him checking into THEIR accounts...
Seeing as the law firm's cheating was what caused Monty to have that $20,000 he spent on the retainer in the first place, it's highly likely that the Rules Lawyer decided "Y'know what, I'm gonna let this slide to make sure this goes right." As said under Artistic License-Law on the main page, the chain of events that happened ensured the best possibility. The Rules Lawyer could call foul on the law firm, true, but this way Monty gets the money immediately.
Added to that, Roundfield is acting on behalf of Ruport Horn's estate, and he can honestly say that Rupert would certainly have told him to award Monty the money.
