If an estate account doesn’t have sufficient funds to pay bills, is there any reason the beneficiairies should not put money into the account?

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If an estate account doesn’t have sufficient funds to pay bills, is there any reason the beneficiairies should not put money into the account?

I am the executor of my father’s estate. The estate is equally divided between me and my 2 sisters. After my father died, his stock accounts were divided equally among us, reserving some money for the estate account directly for bills and taxes. I very much underestimated how much would be needed to pay all the bills and taxes. Thus, each of us wrote checks for equal amounts to go back in to the estate account to pay the taxes. Is there a problem with this? We are all fine on it, there are no problems between any of us, but my sister’s accountant thought it was wrong. Is there any problem?

Asked on April 8, 2011 under Estate Planning, New York

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I am so sorry for your loss.  I would strongly suggest that you seek help from an accountant and an attorney in your area on the matter as soon as you can. Your sister's accountant has a very valid point accounting wise both for the estate and for each of you personally.  But I am more afraid for you as an executor.  No estate assets are to be distributed unless and until all estate debt is paid. It is your fiduciary duty to make sure that the debt is paid before distribution.  So now, accounting wise, it can have an impact.  If an estate can not pay its bills then it is insolvent.  But your Dad's estate was not really insolvent.  Please seek help.


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