How Long Can I Wait to Transfer Assets Out of Estate?
Closing probate estate
Question:
As sole beneficiary and personal representative (with papers etc.), how long can I keep the estate open after becoming personal representative? Is it up to me to determine when to distribute funds and real estate, or is there some time limit? There is a lot going on and I’m not ready to have things in my name yet that don’t need to be.
Response:
Since you’re the only beneficiary, it’s up to you; there’s no time limit to close out the estate. But there could be costs related to delaying, including more court and tax filings. For instance, if the estate holds assets in bank or investment accounts, you will have to obtain a tax identification number for the estate and file annual 1041 income tax returns. If you hold any income such as dividends in and interest in the estate rather than distributing out to yourself, the estate may have to pay a higher tax than you would if the income were reported on your return. This is because estate and trust tax rates accelerate much more quickly than individual rate.
You will have to balance the costs of postponing closing out the estate with those of moving more quickly.
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