Settling estates liquidating stocks
Paying these debts before all other classes is a breach of fiduciary duty and potentially exposes the executor to personal liability, Doyle says.Doyle recalls one estate that carried a significant federal income-tax liability the executor knew nothing about.Your brother wants to stop by next week and pick up Dad’s workshop tools, and your sister could really use an advance on her inheritance to pay her son’s college tuition bill.It sounds reasonable, but don’t make asset distribution too early, or in the wrong order. Before any asset distribution, an estate executor must make sure that the estate is – meaning it actually has enough assets to pay debts, and then some left to distribute.Serving as an estate executor isn’t for the faint of heart. When people make out their wills, they typically name a trusted person as their executor, who then has a legal responsibility to distribute their property according to the wishes of the deceased, and make sure all debts and creditors are paid.But in addition to lots of paperwork and deadlines, the job often comes with a minefield of family issues. Here are some of the biggest mistakes executors want to avoid: Often an executor will start receiving the deceased’s mail and paying credit-card bills and other invoices as they arrive, says Debra Doyle, shareholder at the law firm Greenberg Traurig in Chicago.Here is how to properly distribute estate assets, including household items, real estate, and cash.
If you distribute assets before paying off all estate debts, and the estate were to come up short after taxes and creditors are paid off, the executor alone can be on the hook for those debts.We provide our DIY information as a service to families settling estates or helping with a family member’s transition to assisted living.If your project is too large or complicated to manage yourself, give us a call anytime for a free consultation: 800-913-7747.In some cases, the IRS may be willing to settle with the executor, but not in all cases, she adds.Before paying any creditors, executors should consult with a trust and estate attorney to understand the priority of payments.
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As long as asset distribution is equitable based on the current market value of the stocks and bonds, it doesn’t matter how these are divvied up.