If your loved one has passed away and you are the executor, the first thing to remember is that you have to make sure you pay out creditors and cover debts with the assets belonging to the estate before you dole out those assets to the beneficiaries. While you may want to make sure that people get the assets they’re entitled to as soon as possible, doing so too soon could lead to problems.
When you’re an executor, you may feel like you have to get a lot of things done at once, but you do have to make sure you go in the right order. There is a logical order of events that has to take place, and if you don’t follow the right order, you could end up facing penalties.
You can’t distribute assets until you know what they’re worth
One thing to remember is that you can’t distribute assets until you know what they’re worth. For example, if you have a house full of furniture that belongs to the estate, you’ll need appraisals before you can use those to cover final expenses or sell them for the benefit of the estate.
Even once you know what assets are worth, you may need to sell them off instead of passing them on to beneficiaries. An executor typically has to cover all final expenses before passing on assets. That means that all creditor claims, funeral expenses and other items have to be covered before assets are passed on.
That being said, some assets may be passed on sooner, like those in trusts or those that are outside the probate process.
Distributing assets early could be a bad idea
While you might want to distribute assets out of the estate sooner rather than later, this action could come back to haunt you. It’s a better idea to wait to release assets until you know that there are no further debts. Otherwise, you could end up having to take back certain assets or could be penalized for failing to do what you needed to do in the right order as the executor of the estate.
