• Trusts
  • Estate Planning
  • Taxes
  • Planned Giving
  • Who Can Help
< BACK TO HOME

SENIOR ADVOCATE

By Liza Horvath

 

Estate Distributions Take Time

 

It often seems way too soon after someone has died that an heir will call the executor or trustee and ask, “How much will I inherit and how soon can I get it?”  Setting expectation and helping heirs understand what the estate administration will entail is the responsibility of a good executor or trustee. Open communication with heirs helps assuage fear and, in truth, an executor should try and minimize surprises – especially if they could be unpleasant.  

 

When someone dies and an executor or trustee steps in there are numerous steps that need to be taken to protect both the estate and the heirs. In a probate, when someone dies with just a will and an executor is appointed by the court or in a trust administration when there is a trust agreement and a successor trustee steps in, there is a notice that must be sent immediately to the heirs of the estate. For simplification, in this column we will refer to either an executor or trustee as the personal representative.

 

The notice triggers a period of time during which someone could file a contest to the will or the trust if they feel they have grounds to object to the document. Grounds could include a belief that the decedent was unduly influenced by another to make a will or that the document was otherwise somehow faulty. During this notice period creditors of the estate are also provided the opportunity to file claims for payment of debts the decedent may have owed to them.

 

Under certain circumstances this notice period can run for five or six months and normally personal representatives will not make distributions until after the period has expired. This delay may seem like forever to a beneficiary – and also to friends of the decedent to whom it may appear as if “nothing is being done” with their friend’s estate. In fact, most representatives do a great deal of work during this period – they gather assets, get appraisals, pay the decedent’s bills, address income tax concerns and essentially “tee up the estate” for distribution. For the protection of both the representative and the beneficiaries, it is important that this notice period be observed.

 

Once the time has passed for any potential contests or creditor’s claims, the representative can begin to distribute personal property from the estate or arrange for its sale. The decedent’s final income taxes must be paid and also any taxes due for the estate until finally, some six to nine months later after the death, distributions can be made to heirs.

 

The good thing is that when distributions are finally made beneficiaries can feel confident that there will be no strings attached. If distribution is made too soon, creditors or taxing agencies can come after the heirs for payments so it is best to have all this flushed out by the representative.

 

So, the answer to the question of  “how much and how soon” is probably “not as soon as you would like.”  I like to add – “ and be thankful for whatever you get.”  After all, an inheritance is a gift – not a right.

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com

 


SIDEBAR

TRUSTEES & TRUSTEE DUTIES

PLANNED GIVING & CHARITABLE BEQUESTS

ESTATE PLANNING FOR PETS

YOUR ESTATE PLAN

CRITICAL CHOICES FOR HEALTH CARE

FAMILY OFFICE

AGENCIES: WHO DOES WHAT



USEFUL LINKS
             
Home Continuing Education Calendar Directory of Professionals Members Only Become a Member Search Contact Us
 
The information provided on this website is intended as general reference information only, and is not intended to be a substitute for professional advice based on a particular or factual situation. The information on this web site does not constitute professional legal advice, accounting or tax advice and should not be interpreted as such. Although we have made every reasonable effort to ensure that the information provided is accurate, MontereyTrust, its Members, shareholders, managers and staff, make no warranties, expressed or implied, on the information provided on this web site. The user of the information contained herein accepts it as is and assumes all responsibility for its ultimate use.

© 2013 MontereyTrust.com.  All Rights Reserved.
Follow Us on Facebook!