Estate & Trust Administration For Dummies
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If you're an estate’s administrator, you’re responsible for distributing the decedent’s property if the decedent bequeaths specific assets to beneficiaries. Before you distribute the assets, you should review the will’s bequests and devises carefully. Be sure to follow the appropriate steps for distributing both tangible and intangible assets.

Preparing to distribute assets to beneficiaries

Before you distribute any assets to beneficiaries, familiarize yourself with the will and its instructions:
  • If the property named in a specific bequest or devise is no longer owned by the decedent at death, it has no effect. As the lawyers say, it's considered adeemed. The heir, or legatee, receives nothing, unless state law provides otherwise.

  • If a named beneficiary died before the decedent and the will makes no provision that the beneficiary’s heirs or another person inherits, the bequest or devise lapses, unless state law provides otherwise.

  • If the decedent left a will, check to see whether it contains a clause saying that all debts, expenses, and taxes are to be paid from the residue of the estate, or what is left after gifts have been distributed.

  • If the decedent’s state of domicile has an inheritance tax, be sure that the tax isn’t attributed to the legatee or devisee and payable by them or from what they inherit from the estate.

Distributing the decedent's assets

As you distribute each asset:
  • Have the recipient date and sign a receipt for the property.

  • If the distribution completely fulfills the bequest or devise, obtain the beneficiary’s signature on an assent to the allowance of your accounts as executor.

Be aware that specific types of property may have unique requirements for distribution.

Handling tangible property

Tangible property is property you can touch. It can be divided into personal property and tangible property. Real property (real estate) is always handled differently from other estate assets. How it’s handled depends on state law.
  • Personal property (bequests gifts under the will of personal property) can be distributed after:

    • You’ve been appointed as executor

    • The property has been appraised

    • The date for filing of claims has passed

    • You’ve made sure that you have adequate funds to pay all estate expenses

    • You’ve checked the estate and income tax consequences

  • Real estate (devises — gifts under the will of real property):

    • In some states, the title to real estate passes automatically to the heirs upon the decedent’s death. You don't need to take any formal action.

    • In many other states, real estate held in the decedent’s name alone appears on the estate inventory and must pass through probate in the same way as any other probate property.

    • In some states, to distribute specifically devised real property, you specifically petition the court for approval of distribution of the real property and get a court order allowing the distribution and including the property description.

Handling intangible property

Intangible property is property that has no value in and of itself but is the evidence of value. You can distribute intangibles the same as tangibles. But bearer bonds may require re-registration in the beneficiary’s name.

To have stocks and bonds re-registered in a beneficiary’s name, either send or take the following for each security either to the transfer agent or to a bank or brokerage firm:

  • The bond or stock certificate

  • A form entitled “Assignment Separate from Certificate” with your signature guaranteed

  • A certified copy of your Letters of Authority as Executor obtained from the court

  • Depending on the transfer agent and your decedent’s state of domicile, you may also need an affidavit of domicile, a waiver of state taxes (from your state taxing authority), and certified copies of the decedent’s death certificate and will

If you’re holding the security in an estate brokerage account, you distribute to the beneficiaries by instructing your broker, in writing, of the names in which the securities should now be registered.

If you’re re-registering physical stock and bond certificates, the new certificates in the beneficiary’s name should be returned to you. Send the new certificates to the beneficiary along with a receipt for the beneficiary to sign and return in a postage-paid return-address envelope.

Fulfilling bequest of specific dollar amount

To fulfill a bequest of a specific dollar amount — known as a pecuniary bequest — write a check on the estate’s checking account at the same time you distribute tangible personal property.

About This Article

This article is from the book:

About the book authors:

Margaret Atkins Munro, EA, has more than 30 years of experience in trusts, estates, family tax, and small businesses. She lectures for the IRS annually at its volunteer tax preparer programs. Kathryn A. Murphy is an attorney with more than 20 years of experience administering estates and trusts and preparing estate and gift tax returns.

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