“After all debts, expenses, and taxes are paid, and the final account has been approved, the beneficiaries can finally get their shares, although this does not usually happen as quickly as the beneficiaries would like,” explains Alexander Bove, Jr. in The Complete Book of Wills, Estates and Trusts.
Why all the waiting? In most cases, at least, the executor of the estate must wait until:
- the allowable period for creditors’ claims has expired (in Indiana, that is 3 months after notification is published)
- the tax authorities are satisfied
- any lawsuit or contest is settled
The probate estate, remember, consists of property for which there is no contract that names beneficiaries or title which directs the asset to an owner. Property that would not need to go through those “wait….wait….wait…” delays before being distributed to beneficiaries include:
- Assets held in trust
- Property held jointly with rights of survivorship
- IRAs, 401Ks, and other tax-deferred retirement plans
- Life insurance
There is a set of rules prioritizing the expenses and claims that the executor of an estate must follow. In Indiana, that priority is as follows:
#1 priority: funeral expenses
#2 in priority: administration expenses, including the executor’s fee and attorney fees
#3 in priority: statutory allowances due to a surviving spouse or minor children
#4 in priority: taxes (Federal first, then state), including unpaid income tax, estate and inheritance taxes
#5 in priority: reasonable debts and medical expenses
#6 in priority: other claims have preference under state law
#7 in priority: all other claims
“A provision in the will to pay bequests early, by the way, does not give the executor the right to pay them out before debts, expenses, and taxes are paid,” Bove reminds readers.
The hopeful side, as our attorneys at Geyer & Associates are able to reassure some heirs, is that Indiana is one of several states that allow an abbreviated probate procedure known as unsupervised administration. Unsupervised administration is allowed if the decedent’s will specifically authorizes such type of administration and/or the heirs of the estate agree to unsupervised administration.
An unsupervised probate process allows the executor to collect and secure assets of the estate without having to secure a court order at each stage of the process.
At Geyer & Associates, we advise families on estate administration and lessen their burdens by determining what must be done and the best option to use to make the process easier and minimize expenses. With appropriate planning in place, there can be less “wait….wait…. wait…ing for it!