Legal Question in Wills and Trusts in Massachusetts

Re: When can disbursments be made from an estate?

Heirs may receive a partial distribution from an estate before the one year requirement for final distribution.

In order to do this the heir(s) should sign a waiver and indemnification. This will protect the administrator and the estate if there is a resulting shortfall. The Executor or Administrator has the authority to make the decision about whether or how much may be distributed.

Re: When can disbursments be made from an estate?

Under federal estate tax law and Illinois inheritance tax law, there is no estate or inheritance taxes on estates less than $1,000,000 (in 2003). However, there is a general federal law that says a fiduciary (i.e., an executor or trustee) is personally liable for ANY taxes (including any income taxes) if the fiduciary distributes money or pays bills other than the tax bill, and the remaining funds are insufficient to pay the taxes.

Therefore, the careful attorney advises fiduciaries not to pay out full distributions until they know that all taxes are paid, and in the case of an estate subject to estate taxes, until they receive a closing letter from the IRS and the Attorney General for Illinois.

In your case, you may decide to make a partial distribution, but be sure to retain funds sufficient to pay any taxes and administration expenses. You may wish to enter into an agreement with the heirs for them to indemnify you if the retained amounts are insufficient. You should consult an attorney to make sure you are protected in the circumstances, should you decide to distribute early.

By the way, your question implies a one-year wait requirement. The minimum wait for an Illinois probate estate is determined by the claims period for creditors, which is not always determined by the anniversary of the decedent's death. The claims period depends on whether a probate estate has been opened, and if not, the nature of the claim.

Our comments are based on treating your question as a hypothetical. Accordingly, our comments could be substantially and materially different were we advised of all of the relevant facts and circumstances. Our comments are by necessity general in nature, and should not be relied upon in taking or forgoing action in your circumstances without retaining an attorney. In order to fully explore your legal matter, you should meet with us or another attorney and bring to any such meeting all relevant documents and correspondence, and any other relevant facts.

We are not hired to be your attorney, and no attorney-client relationship exists between us, unless and until you enter into a written retainer agreement with us, tender the agreed amount for a retainer and it is accepted by us. We reserve the right to decline representation should circumstances change.

As you are aware, in Illinois there are various deadlines for filing a complaint, filing an answer to a complaint, or taking other action in order to preserve your legal rights, and avoid a complete loss of those rights. You should retain counsel immediately in order to be fully advised of your rights, and to be fully informed of the applicable time period within which those rights must be asserted. If you were to delay in doing so, it might result in your potential cause of action being forever barred.