Legal Question in Wills and Trusts in California
distribution of property
How long can the Trustee hold the proceeds from a sale of an estate before they are required to distribute the funds to the beneficiaries. Ex. Person passes away 9/08. All personal property is distributed, donated or sold before 7/1/09 and the house is sold 7/30/09. No other property exists. There are no bills or claims by others on the estate. Can the Trustee hold the distribution of funds? Even if 3 of 4 beneficiaries want their proceeds? If so, for how long can they hold up distribution? Note: Trustee is also a beneficiary. Thank you
2 Answers from Attorneys
Re: distribution of property
As soon as the trustee knows there are no other liabilities, or has a reasonable reserve for future liabilities, it can make the distribution. There's no exact time requirement, unfortunately. The trustee may also be able to justify keeping the funds until September, when the one-year statute of limitations for filing claims against the estate/assets of the deceased has passed.
Re: distribution of property
Unfortunately, this is too common of a problem. We are dealing with an almost identical situation right now.
Normally, once the estate's business is completed (the close of escrow as you describe it) there is only allowed a "reasonable" time to distribute the remainder of the assets. There is no clear-cut answer to what is "reasonable" but a month may not bee too long, where several months may be too long; it all really depends on the facts of your case.
If 3 out of 4 beneficiaries are demanding disbursement and only the 4th, who is the trustee, is refusing to disburse, then the other 3 can get a court order for final disbursement and an accounting. Generally, there are alterior motives for not distributing the assets of a trust, be wary of this possibility.
Additionally, you will need to start by looking to the trust itself. It should have some form of disbursement clause. Although it may not give an exact time frame, it should have some information about disbursement and winding up of the trust.
As I stated, we are handling a very similar case right now, so our firm is in a particularly good position to assist you with your situation.
If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided by LawGuru or through our firm�s website located at PasadenaEstatePlanning.com
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