[WSBAPT] Advances on Inheritance

[Mark Anderson]

Dear Listmates:

Husband and wife executed mutual wills under which a payout of $100,000 would be made to each of the husband's two sons, but only after both husband and wife had died.  This is all the sons would be entitled to under the wills.

The husband died.  Husband's sons want to be paid now, rather than wait until after Wife dies.  Wife (my Client) says that sufficient funds exist to do this and is willing to make this happen.

My initial thought is to have my Client tender the money into my IOLTA trust account.  I would then distribute the funds to the sons after having them each execute a Receipt and a Release of the Estate and the Personal Representative (whoever that may be) for the advance.  This will require some "custom" drafting of the Receipt and Release in that my Client has not yet died and so does not have a probate estate.  I will also recommend my Client that she update her existing estate planning documents to reflect the payments made and the release of any personal representative may be appointed for a probate estate.

I have got some questions about this.


  1.  Is this the best way to handle this advance?
  2.  What are the tax impacts, if any, for the Client?
  3.  What are the tax impacts, if any, for the recipients?  (Just curious, in case they may want to reconsider their request to be paid now)
  4.  Are there any other considerations in which I should be aware in dealing with this situation?

In advance, thanks for your input on this.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
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