 Solution

Fix $x$ with $x^N=0$ as a matrix. On the full matrix algebra define $L_x(y)=xy$ and $R_x(y)=yx$. These endomorphisms commute and each has $N$th power zero. The Adjoint representation of a Lie algebra is $\mathrm{ad}(x)=L_x-R_x$. The binomial theorem givesFor $m=2N-1$, each summand has either $j\ge N$ or $m-j\ge N$, and hence vanishes. Therefore $\mathrm{ad}(x)$ is nilpotent on the full matrix algebra and on its invariant subspace $\mathfrak{g}$.

Engel's theorem, in its adjoint form, states that a finite-dimensional Lie algebra is nilpotent if every $\mathrm{ad}(x)$ is a nilpotent endomorphism. Applying it to all $x\in \mathfrak{g}$ provesThis is distinct from assuming that an arbitrary representation of a nilpotent algebra must act by nilpotent matrices, which is false.