Legal Question in Wills and Trusts in Indiana

Re: Income tax affect on an Estate Settlement

The issuance of w-2's has nothing to do with disbursements. The W-2 pertains to Wages. The only thing I can see being an issue is if there is some concern that there was a problem with deductions and witholding. However, competent accounting help should be able to deal with these issues. If the estate is Indiana, you will need to be advised by an Indiana licensed attorney to determine if disbursements can be made before the estate is closed (all financial matters are wrapped up-including final income tax liablility).

Re: Income tax affect on an Estate Settlement

The attorney would be corrrect to not close the estate until all tax issues have been resolved. However, beneficiaries like to receive their disbursements, so the attorney could calculate the likely tax liability, add a cushion, calculate expenses, and ask the probate court to allow partial disbursement of estate funds. If the estate is unsupervised, court permission is not required. Caveat: this would apply in Indianapolis (Marion County) but some other county probate judges may discourage partial disbursements. Anyway, ask the attorney about partial disbursements before closing. Good luck.

Re: Income tax affect on an Estate Settlement

First - please accept my condolences on your loss of your mother.

If this is a WA estate, I'd be hard pressed to figure out what is holding up the disbursement.

Was your mother working when she died? Did she have income tax liability? Most people don't, they pay taxes in excess of what they owe so they will have a refund, not a tax due in April. Since she's not working, calculating her taxes should not be that big a problem.

The probate is public record. You can go look at the documents at the courthouse.

But Ms. Petrey is correct that a reserve can be retained so the estate can deal with additional issues and if everything else is wrapped up and the notices to creditors have been published for four months and all you are dealing with is $69K it is tough to understand what the hold up is.

Elizabeth Powell