Can an inheritance be paid out in installments?

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Can an inheritance be paid out in installments?

We are at the point of “final disbursement” of my mother’s estate to 4 surviving adult children. Approximately $40,000 total will be divided evenly providing $10,000 per heir. One of the surviving adult children has limited income and is receiving rental subsidies in low-income housing. If the full $10,000 is disbursed to this person this year it will impact their subsidy. Is it possible for the Executor (brother) to simply disburse the $10,000 in 2 or 3 payments, 1 per year for 2 or 3 years? Are there any special provision that needs to be set up or do just need to show that the accounting has been done properly? This seems like a simple workable solution.

Asked on October 27, 2012 under Estate Planning, Florida

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It does not need to be paid out altogether but your brother as executor should consider whether a trust could be created for one sibling wherein disbursements can only be accessed tax free one time a year for a limited amount. The executor could simply disburse over a time period but make sure the accountings are accurate for the estate and the sibling beneficiary because otherwise it could have negative tax implications.


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