An inheritance may be coming soon

[lhamo]

Sorry for your loss, Badger.

Just because you are designated as the executor doesn't mean you have the authority to immediately liquidate funds or otherwise move money around. Here in WA you have to:

1) Wait for the death certificate to be issued -- in our mom's case that took several days

2) File the will -- that took a couple more weeks in our case because mom neglected to have certain language in it so the lawyers we chose had to petition the court to have it recognized

3) Obtain the letters testimentary that confirm who the executor is -- only after she got THESE could my sister (the executor) close down mom's old accounts and open the estate accounts.

Process is probably different in different states, but in any event I think the expectation that the BIL in this case can make immediate changes to the accounts is a bit presumptuous.

I would personally try to be less involved/worked up about it. Let the process work itself out. Yes, it would have been nice if everything could have been liquidated when the markets were at their peak, but isn't worth the stressing over too much at your net worth levels.

 

[MarieIG]

Start by making sure that you have complete copies of all will, trust, policies and account documents. Read each carefully.

 

[SheitlQueen]

I’m confused why the capital gains rate on $355K be more than 15% (up to $470,700) or at the very most 20% (on $470,700+)?

Can you explain that for me?

Thanks.

CPA told us if estate paid the taxes, it would be almost 40%, where as if we paid individually it would be much less.

 

[harley]

That doesn't make any sense to me. I'd ask for clarification. And if you get it, please share it.

The value of most items in an estate are set at the value the day the person passed. Stepped up basis for most, so no tax due unless you are over the estate tax minimum or live in an inheritance tax state. The only taxes due for most estates is whatever increase in value occurs between death and sale of the item (stock, bond, house, etc.). At least in my experience.

Edit: For after tax items. IRAs and such you have to pay the tax when the money is withdrawn. No step-up in basis on those.

Edit Edit: I re-read your post. Sounds like it's a done deal, and so I'll probably never know the why on this one. Oh well.

 

[CaliKid]

Lots of partially right info on this thread. A trustee has a fiduciary duty yes. However, a fiduciary duty does not mean they turn everything to cash the day a person dies. A fiduciary duty means to act reasonably. I always advise turning assets to cash but I would not say it's a clear breach of fiduciary duty to not follow that advice. Also, assets from a trust are usually not (at least if a trustee is getting prudent advice) distributed to the beneficiaries right away. In California, for example, the beneficiaries have 120 days to contest a trust after trust notice is sent out. In my opinion any trustee who distributes before 120 days has expired is being risky. Beyond that we usually see some type of distribution around 6 months and the bulk of the distribution around one year. The money is FIRST to pay all obligations of the decedent. In most cases everybody knows what the obligations are, since elderly people usually have a simple life, so waiting a year is probably not necessary but when I am giving the advice I always recommend waiting the year to be sure all possible claims have been dealt with, all tax compliance work done, etc.... People need to be patient. In my opinion it's quite offensive when the beneficiaries start asking about their money within weeks of a person's death. Just my two cents.

 

[Kabekew]

...Just my two cents.

Worth more than that -- sounds like you're in that business professionally? It's spot on with what we're going through with my 101-year-old grandmother's death last August. She had about $4MM all in a trust run by a local bank.

It's definitely not a quick process. They said they had to put out ads in area newspapers asking for creditors and wait some period of time for protests or something. They then disbursed about 5% to heirs in the Will about four months later, and told us the rest will probably be disbursed another few months after that.

 

[Just_Steve]

People need to be patient. In my opinion it's quite offensive when the beneficiaries start asking about their money within weeks of a person's death. Just my two cents.

^This^