“I have settled my mother's estate and sent the final accounting paperwork to my three siblings. Two have signed off on the bond paperwork but my one brother is nitpicking the statements, asking for invoices for the lawyer, the CPA, etc. Can I send the other two their share of the inheritance or do I need to wait until everyone signs off?”
An estate executor or executrix is the person who has been named to administer the estate of a deceased person.
The executor is appointed by the testator of the will (the person who makes the will) or by a court, when there was no prior appointment (and the individual dies intestate).
As the executor, you take a chance in distributing the estate before everyone has approved a final accounting and signed a Refunding Bond and Release.
This means that the heirs accept their distribution and release the executor from any claims concerning his or her administration of the estate.
Nj.com’s recent article entitled “Can I distribute inheritances now or do I have to wait?” says that if one of the beneficiaries doesn’t accept the executor’s form of accounting and his or her purported share, the executor will need to bring an action in court seeking its approval of a formal accounting and release as executor.
This process can be very expensive and, if there is no misfeasance by the executor found by the court, the expenses are usually paid for from estate funds. This reduces the total pay-out to heirs. As a result, it reduces all the beneficiaries’ distributive shares.
An executor has a fiduciary duty to the beneficiaries of the estate, which means he or she must manage the estate as if it were their own and manage the assets prudently. Thus, an executor can’t do anything that intentionally harms the interests of the beneficiaries.
If the executor decides to pay some beneficiaries before all of the named beneficiaries agree to the distributions, he or she may not have the funds to bring the formal accounting action in court.
It’s usually a best practice to wait until everyone approves the accounting and provides the necessary paperwork, before making any distributions to any heirs.
If you decide to take a loan or a hardship withdrawal, be certain that you understand the potential tax consequences of doing so.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference:nj.com (May 8, 2020) “Can I distribute inheritances now or do I have to wait?”