A client’s father’s estate is in probate. His son is the personal representative. Dad’s will leaves everything to his two sons (brothers) to share equally. One of the brothers claim they need money now, and they’re pushing the executor to distribute the funds to them now, even though the estate isn’t settled. He has assured the estate’s representative he will give back the money if it’s needed to pay estate’s debts. Can and/or should this request be granted?
Unless the estate is small and/or family members are in total agreement, executors should be working with a probate attorney who can advise them before disbursing estate assets. I would be cautious but reasonable about distributing funds before the debts are settled, and a final accounting is done. As Personal Representative, a person has legal obligations and must follow certain protocols. Known creditors must be notified, possible creditors alerted, tax returns filed. If you distribute the proceeds now and subsequently the estate lacks funds to pay debts, the estate representative can be held personally liable. And notwithstanding a beneficiary’s assurances and good intentions, there’s a chance they may not give back the funds. In fact, they may not even have the funds to give back at that point.
That said, if the assets in the estate are significant and you’re comfortable doing it, you could consider making a partial distribution to all three beneficiaries, leaving sufficient cash reserves. I generally endorse this approach.
Tell your brothers your dad entrusted you to handle his affairs properly, and that is what you will do.
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