Early Beneficiary Distribution
Preliminary distribution refers to the Distribution of Assets from a deceased person's Estate to Surviving Family, Heirs and Beneficiaries before the Probate process has fully concluded.
That is, distribution takes place after certain initial steps have been completed, but before all Debts, Liabilities and taxes have been paid.
During probate, estate assets are not allowed to be distributed until the deceased's debts have been fully paid, but a preliminary distribution gives beneficiaries financial support or access to assets sooner if they need it, or it can fulfill specific Bequests outlined in the deceased's Last Will and Testament.
For example, preliminary distribution can be used to maintain the value of a property that could decease over time if neglected, pay for school tuition, or on-going daily expenses.
The specific rules, procedures, and limitations regarding preliminary distribution vary by state, so it's best to speak with an Estate Attorney or Probate Attorney when managing a preliminary distribution from Probate Court.
Important information about preliminary distribution includes:
Initial Probate Procedures: When someone dies and their Estate is Administered, an Executor or Administrator is responsible for identifying and Inventorying the deceased person's Assets, notifying Creditors, and paying their outstanding debts.
Preliminary Distribution Criteria: Preliminary distribution is considered when specific conditions are met, which vary by state but may include:
- Allowing for the early distribution of specific bequests or assets designated in the deceased's will
- Ensuring the financial needs of certain beneficiaries, such as Dependents or Heirs, are met promptly
- Identifying assets that do not require further probate proceedings, such as Joint Accounts, property held in Joint Tenancy, or assets held in a Trust.
Court Approval: Preliminary distribution typically requires court approval. The executor or personal representative must file a petition with the probate court, provide details of the proposed distribution and explain why it is necessary or beneficial at this stage of the probate process.
Notifying Interested Parties: Interested Parties, including beneficiaries and creditors, may be notified of the intended preliminary distribution. They have the opportunity to review and, if necessary, object to the proposed distribution.
Execution of Distribution: Once approved by probate court and any objections have been resolved, the executor or administrator can proceed with the distribution. This may involve transferring ownership of specific assets, providing funds, or making other arrangements in accordance with the court's order.
Accounting and Reporting: As part of the probate process, the executor or administrator is usually required to provide an accounting of the preliminary distribution to the court and beneficiaries. This ensures transparency and accountability while the estate is the Settled.
Final Distribution: Preliminary distribution is not the final step in probate. After all estate debts are paid, assets are distributed according to the will or state Laws of Intestacy, and any remaining legal requirements are met, the estate is ready for a Judgment of Final Distribution and ultimate estate closure.
Also known as Early Beneficiary Distribution.
