Why do we need to wait for the distribution of the funds?

Question

My mother passed away on December 4, 2012. She had a Will and Estate. The Will split the inheritance equally between the four siblings. The lawyer is saying that we need to wait until April 17th.

Susan Wideman · Answer

When an estate has to go through Probate, as your mother's does, there are rules about when things can be done. One of the rules is that the Creditors of her estate, have four months to come forward and make their claims, during that time you should not distribute the estate assets because you may not have enough left to pay the creditors who have first priority to the estate assets.

James Frederick · Answer

There is a four month creditor claims period. While it may be *possible* to distribute assets before then, it is not recommended. If there were creditor claims in excess of the estate funds, then it would be necessary to recover assets from the beneficiaries, which is not easy to do. It is best to wait.

James Oberholtzer · Answer

You need to wait for the claims period in probate to allow for creditors to be paid first. Creditors are a higher priority than the beneficiaries. You can't be certain how many they are or how much they claim to be owed until their claims period expires.

Brian Haggerty · Answer

There is a four-month period for presentation of claims against the estate. At least that much time must go by before the PR can pay claims, file his or her final account, and distribute the estate.

Mark Schaefer · Answer

When a will is probated, a legal notice is published once a week for 4 weeks to notify your mother's creditors that they must submit claims if they want to be paid. They have 90 days from the date of the fourth ad to file their claims. No distributions can be made to beneficiaries until after that 90 days has passed and all valid claims have been paid.

Richard Wooster · Answer

A notice to creditors has to be filed and they have a set time to file claims against the estate. Valid claims have to be paid before distribution. You have to wait until the claims are resolved before distribution.

Thomas Edward Gates · Answer

It actually may be later than April 17.  The estate must go through probate, which begins when the court approves the personal representative. Once approved, they must give notice to the creditors so that they can file any claims against the estate.  After the wait period, 120 days from first newspaper notice, and creditors are paid, the remainder of the estate can be distributed to the beneficiaries.

Frances Headley · Answer

In probate you must wait until the creditor claim period is passed before the estate can be closed and distributed.  This insures that the creditors will have a chance to have their obligation paid from the assets of the estate.  Once the claim period is over then the estate can be settled as the creditors have had their opportunity and if they do not take it they bear the burden of their own inaction.

Christine James · Answer

California has creditor claim periods that need to be satisfied before estate funds can be distributed.

William Wilson · Answer

It may depend on payment of creditors' claims.  A creditor has an limited time to present a claim to the Executor.  Distribution prior to payment of creditors could require repayment of distributions.

John Brennan · Answer

Ask the lawyer who is involved for the basis of his advice.

D. Nathan Davis · Answer

Since you have an attorney, you need to ask that attorney the question. Generally, however, funds from an estate are not disbursed until enough time has passed to determine if the estate has enough funds to pay the debts of the deceased person.  If you are unable to talk with your attorney so that the reason is clear, you need to consider hiring a different attorney. It can be quite time-consuming to reach the point where the personal representative is comfortable disbursing the assets of the estate.

Jayne Sebby · Answer

Although estate laws differ from state to state, yes, you probably need to wait.  The executor needs time to notify all creditors and debtors of the estate, locate any other potential heirs, determine and pay any taxes due, collect the funds from the debtors, and pay the creditors before the remains of the estate can be distributed.  Four months is actually a pretty short period of time for all of that to happen.  Sometimes it takes a year or more to settle an estate.

Mark T. Peters · Answer

Probably to make sure that anybody that has a claim against her estate has the opportunity to make the claim and get paid.

Dara J. Goldsmith · Answer

Generally speaking an estate needs to be administered.   A notice to creditors needs to be sent to known creditors and published to unknown creditors.  Your mother's final tax return needs to be filed.  An accounting may need to be provided to the court if the estate is not a set aside or if all beneficiaries do not consent and waive the same. Honestly, that is an exceptionally fast planned distribution.

Edward Armstrong · Answer

Your answer doesn't say much else about what the "lawyer said."  I'm guessing that he told you you had to wait until April 17 because he wanted to file your mother's final income tax return.  If he opened an estate normally he would wait at least six months until the period for filing claims against the estate was up (this is six months from the date Letters Testamentary are granted).  I'm not sure why he would have to wait until April 17 to file the return, that could be done immediately.

Jeffrey Gottlieb · Answer

That seems early actually. Normally you have to wait to see if any creditors make claims against the estate.

Marcus Kroll · Answer

Typically you must wait a minimum of 7 months to distribute, to protect the executor from creditors.

Ben Liu · Answer

Probably to see if there are any claims against the estate.

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Why do we need to wait for the distribution of the funds?

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