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Can some funds be destributed to heirs before the estate is settled
Anonymous3 views3 answers
waiting for fathers will to go through probate in illinois. no one is contesting the will and it is divided equally between children. Can some money be distributed before final will is settled if their is more than money left in the bulk of the estate to pay the deceased taxes and bills
This is a general answer. For more specifics, you need to consult in Illinois attorney who is well versed in wills, estates, and the probate process in Illinois.
Generally, court approval for distribution is required, even if it is obvious that the funds in the estate exceed the amounts owed to creditors (taxes, bills, etc.). The Court generally needs to know the gross amount of money in the estate before any distribution to beneficiaries can occur. Failure to adhere to court rules can have serious consequences, including sanctions.
In many States (you have to check with Illinois counsel if IL follows this rule), failure to obtain court approval before distribution can subject the personal representative (i.e. executor, administrator) to personal liability. This is because the administrator has a fiduciary duty (i.e. acting in good faith and in the best interests of the estate) to the estate, and necessarily the beneficiaries of the estate.
You should contact counsel if the estate does not already have one. While there may be a desire to distribute now based on circumstances, doing so without express court permission can lead to big time problems.
I also am not licensed in IL, so can only comment in general. The answer will depend on the extent of supervision of a personal representative required in IL and in your specific case. Here in WA, most wills grant the personal representative "non-intervention" powers. If this is the case, the personal representative does not require court permission to administer the estate, including interim distributions, and only has to file a simple Declaration of Completion when administration is concluded.
Even where court permission is not required, I would recommend to a personal representative that he or she take care when making interim distributions. Generally, don't make them until after the notice to creditors period has expired, it has been determined whether estate tax is owing, and you have a good handle on the income tax and other expenses of administration. Even then, make sure you hold back an adequate estimated reserve for contingencies. And get receipts from the beneficiaries.
If your father's estate is being probated in by Inedependent Administration (as most estates are in Cook and Lake counties) the Independent Executor should have the ability to make partial distributions of the estate assets without prior court approval. Under supervised administration (the other alternative), the Executor would need court approval before making a partial distribution.
However, it may not be advisable for the Executor of your father's estate to make a partial distribution at this time. If the Executor makes distributions and does not keep sufficient funds to payoff legitimate creditors of the estate, the Executor could be personally liable to such creditors, even if the Executor had no knowledge of the creditor's claim. A cautious Executor may wish to wait for the statutory bar on the claims of unknown creditors to take effect before making any partial distribution.
An unknown creditor's claim is barred if not filed with the Executor or Court by the date which is set forth in the Executor's published notice to creditors. The date in the published notice must be at least six months from the first date of publication. Once this claim bar date has passed, the Executor will know all claims that must be paid out of the estate and will be able to determine how much of the estate may be distributed prior to closing the estate.
In short, an Inedpendent Executor can make partial distributions, but would be best advised to wait until after the statutory claim bar date for unknown creditors has passed before doing so. If you feel the Executor is somehow mishandling the estate, you may wish to contact an attorney to further discuss this matter.