Typically, an executor can distribute specific assets to their assigned beneficiaries as soon as she’s sure the estate has enough value to cover all the decedent’s debts and taxes. These are bequests where the decedent stated in his will that a certain item goes to a named beneficiary. They usually come off the top of the estate. For example, if the decedent's will specifically states that his daughter receives his paid-off Mercedes, the executor is usually obligated to transfer ownership of the automobile first, then divide the balance of the estate among the decedent's beneficiaries.
Effect of Specific Bequests
Generally, an executor deducts the value of specific bequests from the net value of the estate. For example, if the decedent left an estate worth $300,000, and if the estate’s total debts, costs and taxes come to $100,000, $200,000 remains for distribution to his beneficiaries. If the Mercedes’ book value at the time of the decedent’s death is $60,000, then $140,000 remains for distribution among his beneficiaries. If the beneficiaries consist of four children, all of whom the decedent intended to inherit equally, then each would receive $35,000. The daughter who received the Mercedes inherits $95,000 in this case: the automobile worth $60,000, plus an additional $35,000 as her share of the balance. An exception exists if the decedent left her the car, and divided the remainder of the estate among his other beneficiaries. In this case, the other three siblings would receive a little more than $46,000 each, or $140,000 divided three ways, and the daughter would retain the $60,000 Mercedes.
A decedent’s directive to divide his estate among his heirs, without specifying that any particular asset should go to a certain individual, is a general bequest. A general bequest may call for his executor to apportion the estate’s net value evenly among all his beneficiaries, or it might indicate that the decedent wants half his estate to go to his spouse and the remaining half to his four children equally. In this case, the executor must arrange for appraisals of all property of any value. She can’t apportion it without knowing the total worth. Typically, when she closes the estate, she assigns items of the appropriate value to each beneficiary according to the terms of the will. For example, if the entire estate is worth $200,000 after payment of expenses, debts and taxes, four siblings would receive $25,000 worth of property each, and the decedent’s spouse would receive other assets totaling a value of $100,000.
The existence of real estate can complicate distribution, especially when it is the only component of an estate that has any value. If there are no other assets with which to pay the estate’s expenses, the executor is obligated to petition the court to allow the property’s sale. In this case, the executor would divide any remaining proceeds among the beneficiaries, after all debts and expenses are satisfied. If sale is not necessary, then several beneficiaries usually find themselves co-owners of one property. This can result in disputes when they don’t all agree on what to do with it. Typically, the executor is no longer a part of the equation at this point; she has transferred the deed to the home to the beneficiaries. They now own it, and she has settled and closed the estate accordingly. The beneficiaries are usually left to litigate the disposition of the home on their own, or to negotiate a solution to their dilemma.