Reasons Why Estates Might Take Longer to Settle
With all of the hype regarding living trusts, one claim frequently made is that a living trust will settle an estate faster than probate, probate being the process of filing the Will with the Register of Wills office and then administering the estate. Actually, the length of time it takes to settle an estate depends primarily on other factors. Probate and trust appraisals can be completed in a reasonable time if other considerations do not cause delay. It is these other factors that can leave executors (and sometimes attorneys) up nights thinking of ways to cut through the difficulties.
While sometimes delay on the part of the executor or attorney handling the estate is a possibility, here are some stumbling blocks that might not immediately come to mind.
- Assets are not liquid and not easily disposed of. Real estate is a typical problem. Here are some examples. The house may be in poor condition and need major modifications to be sold. The septic system or well does not pass inspection. One or more family members have a sentimental attachment to the property and do not want it to be sold. Someone in the family wants to buy the property but cannot qualify for a mortgage or wants to hold out for a lower price even though that would not meet appraisal standards. Typically, the property needs to sell at fair market value. Someone, either a beneficiary or a tenant, is living in the house. Parties are reluctant to list the house in a poor market. The house needs major cleanout after years of hoarding and the family, concerned that items of sentimental and personal interest might be taken away by a cleanout service, decides to work on the property on weekends. While this solution might initially seem to be a good idea, cleanout almost always takes much longer than expected.
Time shares can be an especially difficult problem. One case we handled involved time shares in multiple states. In addition to the difficulty in marketing “used” time shares, the transactions were handled as a real estate title transfer in every state. Anyone who wants an estate to be easily settled should not own multiple time shares, if possible.
- Property cannot be distributed the way originally intended. Heirs might not be easily located. Trustees or Personal Representatives appointed in the Will might not be available or might have been appointed initially without considering their geographical distance, desire to serve, or physical infirmity, a matter that sometimes does not come to light until later and might not be the fault of anyone involved. Sometimes property is designated to a special needs individual who is receiving government benefits. In that case, a first party special needs trust (a so-called (d)4(A) trust) might need to be established first so that the individual does not lose benefits. If the party is age 65 or older, since a (d)4(A) trust would be unavailable, other measures might also need to be considered.
- Another business transaction needs to be completed first. Sometimes resolution of an estate is dependent on sale of a business or completion of another estate that flows into it.
- Misunderstandings among beneficiaries. Beneficiaries might misunderstand the extent of their inheritance. Here are some examples. A beneficiary might mistakenly believe that the estate is much larger than anticipated. This often happens when someone, especially an older relative, passes after a long period of chronic illness. Family members might underestimate the cost of skilled nursing care or 24 hour at-home care which often can run $10,000 or more per month, all of which can deplete the estate. If there are multiple beneficiaries, even a larger estate is considerably reduced by distribution to all of them.
Sometimes there are disputes over personal items – the grandfather clock, a piece of jewelry or artwork or furniture. The items do not need to be expensive. Estates have been delayed regarding the turkey plate used at Thanksgiving or costume jewelry.
In all of these cases, once the problem is determined, it is best to work together to solve it. Estates have unfortunately been the source of many long term family disagreements. If they can be settled amicably, everyone benefits in the end.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.