08 May Can I distribute inheritances now or do I have to wait?
Q. 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?
A. We’re glad you asked.
You don’t want to make a mistake here.
As the executor, you take a risk in distributing the estate before everyone has approved a final accounting and signed a ‘Refunding Bond and Release’ accepting their distribution and releasing you of any claims with respect to your administration of the estate, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
“If one of the beneficiaries fails to accept your form of accounting and his or her purported share, you will need to bring an action in court for approval of a formal accounting and your release as executor,” she said. “This is expensive and, absent misfeasance by the executor, is generally paid for from estate funds.”
As a result, it reduces all the beneficiaries’ distributive shares, she said.
If you pay some beneficiaries before all beneficiaries agree to the distributions, you may not have the funds to bring the formal accounting action in court, Romania said.
“It is generally recommended to wait until everyone approves the accounting and provides the necessary paperwork before making any distributions,” she said.
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This story was originally published on May 8, 2020.
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