When Lily returns to New York from Europe, Gerty greets her with the news that Lily’s aunt suddenly died. Mrs. Peniston disapproved of Lily’s trip with the Dorsets and likely heard of the scandalous breach in their friendship. Consequently, Lily dreaded arriving home and seeing her aunt. Now Lily anticipates she will be able to pay her debts with her expected inheritance from Mrs. Peniston. At the gathering of relatives, the lawyer reads Mrs. Peniston’s will. Despite everyone’s expectation that Lily will be the primary heir, Mrs. Peniston leaves most of her estate to her cousin Grace Stepney. Mrs. Peniston bequeaths only $10,000 to her niece Lily, effectively disinheriting her.

Lily notices that her aunt’s legacy coincidentally almost equals the amount she owes Gus. Gerty feels that Lily’s aunt has treated her niece unjustly. Lily realizes that Mrs. Peniston altered her will only six weeks earlier. To make George believe his wife was jealous, Bertha spread the false story that Lily was trying to marry her husband. Lily recognizes that people chose to believe Bertha because of her greater wealth. Gerty assumes that Lily can clear herself by simply telling the entire truth. However, Lily replies: “well, the truth about any girl is that once she’s talked about she’s done for; and the more she explains her case the worse it looks” (236).