How assets are distributed in probate

jockewingJune 18, 2010

I am what is called the "independent administrator" of my grandmother's estate. We are in Louisiana. She died about 2 months ago, and we are going through the probate process. Louisiana has what is called "independent administration" where the executor (me) can do alot of the actions needed to wrap up the estate without court approval.

All the debts of the estate have been paid. There are 2 investment accounts, a house, a car, and a bank account. As the independent administrator, I have already paid cash to 2 of the heirs who were left a specific amount in the will, and am in the process of transferring the investment accounts out of my grandmother's name into the names of the heirs. We have signed the petition for possession and the descriptive list, but we still can't file it with the court as there are still a couple of things I need to sign as the independent administrator to finish the investment account transfers.

My question is, why can I not distribute the remaining cash to myself and my brother? The lawyer says we should wait for the judgement, but we need some of the money pretty soon and this is taking forever with the endless paperwork. If I have been able to liquidate investment accounts and pay other heirs out of that same account, why would I not be able to distribute the rest of the cash?

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sushipup1

When I handled my mother's estate, I was advised to keep some money in the account, just in case. So if you have, for example, $50,000 in cash, you might want to hold back 10% or so. Suppose you need to pay property taxes or insurance that you've forgotten? But yes, I'd pay out a good portion of the money. Just remember that once paid out (even to yourself), it's like spilt milk and hard to get back if needed.

    Bookmark   June 18, 2010 at 10:15AM
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devorah

You do want to keep some money in the estate as mentioned above. You haven't paid your mother's final income tax yet for one thing. She may or may not owe something on that. If you distribute to your brother, it might lead to unpleasantness if you have to ask for some of it back. I assume too, that there is still time for a creditor to pop up. I can't imagine that the time has run out on that, but I don't know Louisiana law. I believe that Louisiana law was originally based on the Napoleonic Code and is therefore somewhat different from the other states that relied on British law

    Bookmark   June 20, 2010 at 4:50PM
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maifleur01

Yah. Under the Napoleonic code only men could do anything. Just be glad someone along the way had a female in the family that they wanted to received property or money or it might still be that way.

They are correct about debts poping up and the taxes. If you have not done so an estimate can be done by using the 2009 Federal tax forms. So far the rates will be the same for 2010 so would give you a rough estimate of taxes.

The judge did a strange thing when we administered my dad's estate. We had also been conservators and guardians so that may have had something to do with it. He issued a statement in court that "no taxes would be do on the estate and if there were any problems to have the taxing authority to contact him". If you do go to the court for the final declaration be certain to listen carefully. I did not see where any taxes would be due because the state followed Federal guidlines but apparently the judge did.

    Bookmark   June 21, 2010 at 6:38PM
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dreamgarden

"My question is, why can I not distribute the remaining cash to myself and my brother? The lawyer says we should wait for the judgement, but we need some of the money pretty soon and this is taking forever with the endless paperwork. If I have been able to liquidate investment accounts and pay other heirs out of that same account, why would I not be able to distribute the rest of the cash?"

What does your accountant have to say?

    Bookmark   June 22, 2010 at 10:54AM
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jockewing

Well I asked the lawyer about this again yesterday and he said I could distribute the cash. I think he wanted to be sure he got paid (I told him his check was in the mail) and he wanted to be sure I did not close the account until everything was completed and settled.

I guess he was afraid I would overdraw the account or soemthing, but I've been tracking all this stuff to the penny. I did hold back just a few thousand in case something unexpected pops up.

    Bookmark   June 22, 2010 at 11:22AM
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dreamgarden

"Well I asked the lawyer about this again yesterday and he said I could distribute the cash."

Will your lawyer be filing the final city, state and/or federal income tax returns, state inheritance and federal estate tax returns, or do you have an accountant for this?

    Bookmark   June 25, 2010 at 10:07AM
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devorah

Louisiana is a community property state due to the Napoleonic Code - so not all bad

I don't think you necessarily have to run to an attorney or accountant to take care of the taxes. If you do your own, you can certainly do these. The IRS has really quite good guides

I know I am in the minority, but I think that a thinking person can take care of most accounting and probate on their own if it is relatively simple. I have yet to run into a problem

    Bookmark   June 27, 2010 at 4:17PM
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maifleur01

Curious and perhaps off topic but what does Louisiana being a community property state have to do with the OP's question except perhaps spouses of both heirs may have to agree to the final settlement?

    Bookmark   June 28, 2010 at 8:12PM
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devorah

I was responding to your comment that under the Napoleonic code only men had rights - and yet they believed in community assets. It has nothing to do with the question of the OP. Actually under the law of most community property states, property that is inherited is the separate property of the heir unless it is comingled - and the burden of proof would be on the heir to prove there had been no comingling. A friend of mine was absolutely furious when I told her that because her hasband had just inherited two million dollars and she was anxious to spend some of it.

    Bookmark   June 30, 2010 at 3:13PM
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