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  1. #1
    Join Date
    Oct 2006
    Posts
    4

    Default Can You Be Forced Into Early Estate distribution

    We are in the process of splitting up my parents living trust estate. I was told that we couldn't do any splitting or distribution till January since that is when the new tax year begins. I really want to get this over with since my sibling is being difficult and want to be done with her. So my question is can we split the stocks, bank account etc now or do I have to wait till January. Thanks for your help.

    Annie

  2. #2
    Join Date
    Oct 2006
    Posts
    4

    Default Can we be forced into Early Distribution?

    My husband is successor trustee of my parent's estate. Both of my parent's were in nursing homes before they died so much of their liquid cash is gone. My sister wants an early distribution of some cash because she is broke. The only way we can do it is to cash in stock or liquidate an IRA. My husband doesn't want to do this. Can my sister force the issue? She was estranged from my parent's for the last 5 years- and she doesn't understand why their liquid cash is gone. She just wants cash no matter how we get it- HELP!

  3. #3
    Join Date
    Oct 2006
    Posts
    7

    Default Re: Estate distribution

    I have settled both of my parents estates. Since no attorney has yet answered your questions, I will make comments based on my experiences.

    If the estate goes into next year, you will probably have to file a tax return for next year as well increasing the cost. If you are working with an accountant, he would be your best resource in the tax return questions.

    The IRA may have individuals named as beneficiaries (rather than the trust); if this is the case, the institution managing the IRA will arrange the distribution to the individuals. Any bank accounts with joint ownership and pay on death are also handled by the financial institurion. In my state, there must be a release from the state tax commission before the accounts can be distributed and this is only issued after the estate tax form is filed and cleared (2 months after the return was filed).

    If there is no property requiring probate and all of the bills have been paid, the biggest issue in settling the trust is filing the estate tax returns if they are required. Note that some states have lower asset levels than the federal level necessitating the filing of the estate tax return.

    Be sure that all of the bills have been taken care of! I had unexpected bills show up 9 months after my mother died where the insurance had refused payment. The estate tax returns had already been filed. Fortunately they were small and I just paid them myself.

    I understand even a well organized, simple estate will take nearly a year. Depending on the types of assets, early partial distributions may not be possible depending on the estate tax filing requirements and procedures.

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