|Posted on May 22, 2014 at 12:55 AM|
Most people put minimizing delays in distributing assets following death as a fairly high priority goal. The question is: what are some practical and cost effective ways of achieving that goal? Titling accounts and other property in joint ownership with right of survivorship is a well known and effective method of passing property upon death. Another well publicized method is the creation of a revocable living trust—provided that most or all of one’s property is titled in the name of the trust prior to death. Another method for reducing delays is through unsupervised administration of an estate, which is readily available simply by including in a will an authorization or direction that one’s estate be administered without court supervision. The use of joint ownership with right of survivorship, trusts, and unsupervised administration of an estate all can permit substantial, or even full, distribution of a decedent’s property within a short time after a decedent’s death. But claims (by non-attorneys, and some attorneys too, primarily with respect to trusts) of complete distributions within days or weeks after death, while possible in some cases, do not reflect reality in most cases. The truth is that most “delays” in distributing a decedent’s property after death are due to the need to deal with actual and potential creditors or the need to sell real estate or other assets owned by the decedent. Creditors (who are sometimes not fully known or anticipated) have up to 9 months after a decedent’s death to file a claim. While partial, and even substantial or complete distributions can be made before the expiration of that 9 month period, the personal representative or trustee who makes such distributions risks personal liability to creditors for the amount of unpaid claims, and beneficiaries who receive such early distributions need to understand that they may be required to return all or part of amounts they receive in order to pay debts, claims, and taxes. Even when an estate is administered, either with court supervision or without court supervision, most “excessive” delays are due to dealing with problems with creditors, taxing authorities, finding a buyer for real estate at the desired price, or in some cases, lack of diligence on the part of the personal representative (also called the “executor”). Because many of the same issues that can cause delays in an estate (including those described above) may also be faced by a trust, the mere existence of a trust does not necessarily mean that distributions can be completed any faster than they would be in an estate. The key, in most cases, is appointing a personal representative or trustee who will act with prudence and diligence in seeing that creditors and taxes are paid, and that real estate that has to be sold is put on the market as soon as possible, at a realistic price.