Can "some" Estate assets be distributed before final tax returns are filed? AZ Letter Testamentary issued & required 4 months from initial Notice to Creditors has passed. Residence not yet sold but, of cash assets remaining, if enough funds are retained in the Estate A/C to cover all projected expenses (including tax returns & costs for maintaining the residence until sold), can the remainder of the funds be distributed to the heirs now?
1 Answer from Attorneys
Yes, it is possible, but certain risks are involved in doing so. If you want to make partial distribution of the estate, the safest way is to seek court approval of the distribution. Remember that the presonal representative of the estate owes a fiduciary duty to the creditors, the taxing authorities and to all of the heirs. You should seek legal counsel to determine if this is appropriate.