Distribution of the net estate is just about the last and happiest duty of the executor or administrator. Even so, it must be done properly.
1. Distribution is only done after a long list of tasks has been completed:
- Take possession and take care of all the property of the estate.
- File an estate inventory and keep records of all transactions on behalf of the estate.
- Collect all claims and recover all property owned by the estate.
- Set aside a family allowance, in certain instances.
- Pay expenses of last illness, expenses of burial, and expenses of administration.
- Pay claims against the estate, including debts of decedent.
2. The net estate is the sum total of assets left after all the steps listed above have been completed.
3. As a fiduciary, the executor or administrator must be fair and impartial among all beneficiaries or heirs.
4. If the decedent left a Will, the executor must distribute the net estate to the beneficiaries according to the instructions in the Will.
- Follow the instructions for distribution in the order they are listed in the Will.
- However, watch for formulas that modify one distribution based on another.
- Also, if the beneficiary predeceased, pay attention to whether the gift is then to the beneficiary’s heirs, or if it then lapses.
5. If the decedent died intestate, the administrator must distribute the net estate to the heirs according to the proportions ordered by the court.
- The order will set out the percent of the estate due to each heir.
- Note that an heir may own different shares of different types of assets.
- The percentages are set by the Texas Estates Code.
6. To distribute real property, the executor or administrator should sign a properly drafted distribution deed.
7. The executor or administrator should obtain a signed receipt from each beneficiary or heir for each distribution.
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