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Question:

I’m the personal representative of my uncle’s estate. I’ve taken care of just about everything that needs to be done and would like to distribute the estate, but one beneficiary refuses to sign a release. What should I do?

Response:

It’s typical for personal representatives distributing estate assets or for trustees closing out trusts to ask the beneficiaries to sign a release so that no one will come back asking questions or challenging the decisions they made. If those questions or challenges come in after all estate or trust funds have been distributed, the personal representative or trustee may have to use their own funds to hire lawyers or accountants to respond to the demands.

That said, the rights of beneficiaries to their share of estates or trusts are not dependent on their signing a release. They are entitled to their share whether or not they sign the release.

However, there are other steps you can take to protect yourself from potential future liability. In the case of an estate, you can prepare a formal account, file with the appropriate probate court and seek it’s approval of your actions as personal representative. This will involve extra time and legal cost both preparing the account and seeking court approval, but it would relieve you of any second-guessing after the fact.

In the case of a trust, it’s not quite as clear how to completely relieve yourself of liability. The trust or state law may provide some protection, for instance giving beneficiaries a certain amount of time to raise objections after receiving a formal account. In any case, preparing a formal account and sending it to the beneficiaries, asking them to let you  know if they have any questions, is a good defense against a later complaint.

One question is who should bear the extra expense of preparing these accounts and perhaps going to court. There’s certainly an argument that the recalcitrant beneficiary should pay, rather than the ones who are more cooperative. You may give that beneficiary the choice, of either signing the release, or waiting for the court approval or formal accounting, telling them that it’s only fair that they pay the extra cost. This may induce them to sign the release or at least to raise any questions they may have. It could be that they will be reassured with your response.

In any case, you should be able to distribute the bulk of the estate or trust to the other beneficiaries while this process is playing out.

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