Wednesday, August 31, 2011
Show Me the Money!
In the movies and on television, when a person dies, there is often a dramatic scene where all the family members and friends gather for the "reading of the will." All the usual characters are present: the grieving surviving spouse, the much younger girlfriend, the greedy son, and so on. The lawyer pulls out the will and begins to read it out loud. Some are shocked, some are excited, and some are disappointed. The scenario always makes an excellent story line.
In real life, formal "readings of the will" are not common any more. Instead, most beneficiaries learn about the contents of a decedent's will or a trust by receiving a copy of it in the mail. For decedents dying with wills, the executor must send a copy of the will to each natural heir and each person named in the will along with a copy of the petition to the court to open the probate. The beneficiary will also receive a notice of the date, time, and location of a hearing. It is not necessary for the beneficiary to appear at the hearing unless the beneficiary wants to challenge the validity of the will or the appointment of the executor.
For decedents dying with trusts, the successor trustee is required to send a specific notice out to each natural heir and named beneficiary of the trust informing them that the person died with a trust, that they have a right to a complete copy of the trust, and that they have a limited time in which to contest the trust.
In either case, if the beneficiary or heir has no reason to contest the terms of the will or the trust and does not object to the identity of the executor or successor trustee, then there is not much for the beneficiary to do. The process to settle an account involves many tasks and duties imposed upon the executor or successor trustee: taking inventory of and appraising the assets, filing final tax returns, acquiring a new Tax ID number, sending out notices, filing documents with the Assessor's Office and Recorder's Office, protecting and investing the assets, paying off final bills, etc. Although a trust administration is faster than probate, in both cases there is a process that must be followed.
Many beneficiaries who are not involved in the process of settling the estate do not understand how much work is involved. After several months, it is not uncommon for some beneficiaries to start inquiring. "It's been a long time," they say, "Show me the money!" This phenomenon can be very frustrating for the executor / successor trustees and their attorneys who are working very hard to make it possible for the distribution to happen.
As a beneficiary, while you do have a right to keep informed of the status of the settlement, it is important to understand that it is an involved process and that patience is the key. The more grief you give the executor / successor trustee, the longer - and perhaps more expensive - it might be to settle the estate.