Settling a Large Trust

My question involves estate proceedings in the state of: TX

Hi everyone, new to the forum.

We are ten month's into settling my late Sister's estate. Wells Fargo Bank is the corporate executor. Appraisal's have been done, assets have been moved to cash as much as possible, and our tax attorney just received the new 2013 estate tax form which he said he should have ready by the end of this month for review.

We paid our calculated tax obligation in October last month. I'm told if all goes well, the IRS will accept the return with the discounts we have applied for and hopefully won't come back for more or audit.

My first question is, the heirs (myself and my two children) are being told no distributions can be made until a closing letter is issued by the IRS, who have a three year statute of limitations to answer. In the mean time, bills need to be paid, and baby formula needs to be bought. It just seem's unfair to me that the professional's can make 'distributions' to themselves in the way of fee's while the heirs starve out waiting. I can't even get the guy to make an interim distribution. Am I being handed my hat? :confused:

You need to have your lawyer review the trust documents and advise you.

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Quoting Mr. Knowitall

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You need to have your lawyer review the trust documents and advise you.

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That is the dilemma. The lawyer(s) are being paid by the executor. I don't know who is really working for who.

If I engage another attorney solely on my dime, that could spook the executor and he could shut things down even worse by going to Wells Fargo legal department.

I had no idea that when you inherit property in Trust, you may end up waiting for years for a distribution. This has taught me to make a specific bequeath in your will. Bequest's are paid promptly.

Estates have executors. Trusts have trustees.

A trust can pay out ahead of an estate, with lower administrative costs. It all depends on the terms of the trust and the facts.

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Quoting Mr. Knowitall

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Estates have executors. Trusts have trustees.

A trust can pay out ahead of an estate, with lower administrative costs. It all depends on the terms of the trust and the facts.

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Incorrect in our situation. And I know the difference between a Trustee and an executor. :disturbed:

A Trust, Trustee, or executor cannot make distributions to beneficiary's before it is settled when the Grantor dies. It can, but then if the IRS audit's the estate return, any account that $$$$ was transferred into will become part of the audit.

Also, the IRS can dismiss any LLC or LLP discounts applied for on the estate return if distributions were started from a Trust before a closing letter according to what I've been told.

You now appear to be describing some sort of pour-over provision in a will, but it's pretty clear that you don't have a grasp of what's happening and are unable to articulate a coherent sent of facts. Consult a lawyer.

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Quoting Txflyer

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I had no idea that when you inherit property in Trust, you may end up waiting for years for a distribution. This has taught me to make a specific bequeath in your will. Bequest's are paid promptly.

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Not really. An executor/personal representative who starts making any distributions from a probate estate before any tax and creditor issues are settled is placing him/herself at risk.

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Quoting Mr. Knowitall

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You now appear to be describing some sort of pour-over provision in a will, but it's pretty clear that you don't have a grasp of what's happening and are unable to articulate a coherent sent of facts. Consult a lawyer.

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It's too complicated for a forum obviously.

Clever way of saying I am an inarticulate ignoramous ..... :friendly_wink:

CA 1 TX 0

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Quoting harrylime

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Not really. An executor/personal representative who starts making any distributions from a probate estate before any tax and creditor issues are settled is placing him/herself at risk.

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Risk entirely depends on the size of the estate and the portion that is being distributed. If the estate is large enough to require estate taxes (and apparently this one is), there is virtually no likelihood that a 10% distribution (for example) would be at all risky.

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Quoting llworking

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Risk entirely depends on the size of the estate and the portion that is being distributed. If the estate is large enough to require estate taxes (and apparently this one is), there is virtually no likelihood that a 10% distribution (for example) would be at all risky.

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While I don't disagree, most personal representatives/trustees take the conservative path.