Heirs often want to know if there is any way to get their inheritance faster.

Probate can take a long time, for various reasons, and lately it has been taking even longer because IRS delays are making tax clearance even slower. So, here are some options for heirs in a cash crunch.

Expense reimbursements

First, the executor can pay expense reimbursements as soon as possible. This includes reimbursing heirs who paid the funeral bill, court or lawyer fees, clean out or move out costs, co-op fees, mortgage payments, and property repairs. Heirs who fronted these funds are entitled to be reimbursed from the estate.

Of course, reimbursements are not actually your inheritance, but repayment of money owed back to you. But if you need liquidity NOW, this can usually come out of the estate quickly with minimal delays. For example, court fees are unequivocal, so those can be reimbursed immediately once the estate has funds available.

Requesting a reimbursement from the estate is a quick way to get cash back into your pocket. Some heirs pull thousands of dollars from their personal bank accounts to cover the estate expenses and can’t afford to wait a year or longer to replenish their accounts.

Intermediate accounting

Another alternative it to do an intermediate accounting. One of the main steps to close an estate is to do an accounting of the full books and ledgers of the executor’s tenure (every dollar that came in and out of the estate). The accounting is usually done at the end of the estate process because it is time-consuming and costly. It’s difficult to track down every transaction over the span of several years, even though the executor keeps track as they go along.

An intermediate accounting takes place in the middle of the probate process, so that the executor is approved to distribute a portion of the funds to the heirs. The problem with an intermediate accounting that the executor is duplicating work that they have to do all over again at the end of the estate.

An intermediate accounting doubles the cost but may be worth it if heirs need cash and the delays are really long. This may frustrate other heirs who do not see a need for an intermediate accounting, and they may demand that the duplicate costs be paid for by the heir who wants the accounting. Most people don’t like paying for something twice if they don’t have to!

Inheritance advance loan

There is another option, but I highly discourage it: the inheritance advance loan. It is BAD idea, because it is a loan that takes advantage of an heir’s need for money.

With an inheritance advance loan, you can pay 50-100% interest/fees! If your share of the estate will be $50,000 and you need $10,000 now, the loan company will give you $10,000 now. But, at the end of the estate, the executor will give you $30,000 because for the $10,000 that you borrowed, you owe the lending company $20,000. If for some reason your share of the estate becomes less than you thought it would be or if you need to spend more money on litigation, repayment may be a problem.

In the narrowest of circumstances, this option may be worth it. Please explore the other options of expense reimbursements and intermediate accounting first. Talk to your executor or attorney to make sure all other options are exhausted before perusing an inheritance advance loan. This option exists for worst case nuclear emergencies.

Probate

Check out by book, “How Probate Works,” so you can understand the probate process and have reasonable expectations up front about getting your money. We try to make it clear to our clients that this process could take months or even years. Some clients may decide to go to other more optimistic attorneys, but I don’t like to over-promise and under-deliver.

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“There’s no such thing as a perfect estate plan,” Sherlock Holmes would probably say if he did probate. What we mean is that things may not work out the way you plan, no matter how hard you try.

We’ll review an anonymous probate case study, where even in an ideal planning scenario (knowing the time of death to the minute, and plenty of time to plan ahead), there were all sorts of probate problems.

Solo Ager, Linda, was terminally ill, and had a planned end of life. This means she knew, to the minute, when she would pass, and she had months to plan in advance. Here’s how her probate unfurled. This is not a criticism of Linda; rather an acknowledgement that it is difficult to plan a perfect estate.

What part of her estate plan worked?

First, Linda hired us as her professional executor. This acted as a safety net because we are experienced to look for problems (and she let us know that there would be problems).

Linda also had pre-planned funeral arrangements, which allowed her remains to be treated exactly how she wanted.

She made sure to arrange for the care of her dog. This helped to avoid the panic of a dog in the apartment with no caregiver.

Lastly, she did a good job of canceling her utility services. Usually, we have to determine what services the decedent utilized, so this saved lots of time.

What part of her estate plan didn’t work?

First, Linda did a good job of preparing her will and naming a professional executor. However, she kept her original will in her apartment, instead of storing it with her attorney or somewhere else. This caused problems for several reasons.

If your original will gets lost, it is presumed that you intentionally destroyed it, thereby revoking it. If your attorney, CPA, or trusted advisor loses it, then they can petition the court to rely on a copy. The professional has no right to revoke your will, so it can be assumed that they just lost the original. While a professional losing a will is not good, at least it doesn’t negate the whole thing.

Storing the original will in your apartment requires another layer of the court process. The executor needs the will to get letters of testamentary in order to enter the apartment. This doesn’t work when the will is in the apartment to begin with. It’s quite the conundrum. It’s not the end of the world if this happens; there is a special procedure in place so the executor can enter the apartment to look for the will. This procedure just adds more time and money to the process.

Second, Linda relied too much on her cell phone. She had a lot of information on her phone, and she referenced that information in her instructions to us. She even gave us the password to her phone. Unfortunately, her phone was stuck overseas. We learned the hard way that you can’t just mail a phone. The battery causes issues in shipping, and the phone may be dismantled by the custom agents. There is a lot of red tape in mailing a phone. Now, either I or another authorized person will need to transport the phone to the United States.

Lastly, Linda arranged for her keys to be mailed to us, but we have not received them. Once we get appointed by the court, we will work it out with her apartment building.

What were some unexpected probate problems?

First, Linda assumed that her friends and heirs would work harmoniously with her professional executor (me). So far this has not worked out. One family member thinks I am a fraud because Linda didn’t tell her family about her plan. Another heir is not happy about how this is working out, so the heir hired her own attorney.

Linda assumed that I would be able to call her family and friends to get information that I need. But that didn’t happen. I doubt Linda expected this from her loved ones – no one usually does.

Of course, we will work around all of these issues; it’s what we do! From a planning perspective, her plan was a very good best-case scenario. There was no time variables and she had plenty of time to plan. But, even in the best situation, nothing is perfect.

To learn more about probate, check out my book, “How Probate Works,” available on Amazon. The best way to plan is to look at how it may all unfurl in the end.

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Does the MTA covid death benefit have beneficiaries, and if not, who should inherit? The MTA is paying a pretty generous amount (about $500,000) to the estate of any employee who passed away with or from covid. The requirements seem to be tightening up a bit, but we’ll see what comes of it.

Have your MTA Covid death benefits been paid to the wrong person?

We’ve had a few of these cases. Although well-intentioned and hardworking, the folks at MTA don’t seem to be experienced with estate issues. They are probably also overwhelmed because Covid benefits are a new thing. Because the benefit is significant, MTA is probably getting a different energy from these heirs as opposed to heirs just looking to claim the decedent’s last paycheck.

For example, Mr. S. was confused because MTA told him they would pay benefit to him. Since he was named as beneficiary on son’s pension, Mr. S. was told that the Covid benefit would go to him, too… even though Mr. S.’s son had a surviving wife and kids.

It seems that the son never updated his beneficiary designations when he got married and had kids. We see this happen often, and it is a main reason why we don’t recommend using beneficiary designations.

In another example, the MTA paid the full amount to Mrs. B., but her husband died with no will and with kids from a prior marriage.  When you die with no will, your estate is supposed to go roughly half to your surviving spouse and half to your kids. Should his children from a prior marriage have received part of the benefit? It was actually the kids who called us to ask this, because dad’s second wife (Mrs. B.) got all the MTA Covid death benefit money.

Does the MTA Covid death benefit have named beneficiaries?

While possible, it is highly unlikely. This emergency benefit only came into existence less than 2 years ago. It’s an automatic benefit, not something employees signed up for, like a pension or life insurance.

If naming a beneficiary is not the case, it’s highly unlikely that Mr. S. being named on the pension carries over to the Covid death benefit in the example above. I can’t think of any other scenario where beneficiary designation from one policy gets automatically transfers to another. That’s like saying, “I named my wife as beneficiary on my life insurance, so she should get my IRA, too.” We ended up confirming that there was miscommunication with the MTA in Mr. S.’s case.

Who is supposed to inherit the MTA Covid Death Benefit?

In the absence of beneficiary designations, death benefits get paid according to the will, or if no will, then according to default inheritance law (intestacy). This has been consistent in our dealing with the MTA. They are requiring proof of a court-appointed executor or administrator before they pay anything to anyone. In our experience, the MTA has been handling this properly, yet sometimes heirs have a misunderstanding.

So in Mrs. B.’s case: If a spouse has received funds and no funds were paid to the kids, either:

1. There was a will that the kids didn’t know about and they were disinherited under that will; or
2. Maybe the spouse received funds not as the wife, but as the executor/administrator. If this is the case, the funds may pay out to the kids when estate is closed; or
3. MTA paid the benefit directly to Mrs. B., even though she is not the executor/administrator; or
4. B. received the check in her capacity as executor/administrator, and she is not fulfilling her duty as fiduciary.

So, with $500,000 per claim, has the money run out? The program still exists, but the MTA is tightening qualifications for the benefit. When we first worked on these claims, “Covid” just had to be on the death certificate. Now the MTA wants medical records, and Covid needs to be the primary cause of death. They now have departments and committees dedicated to determining whether this benefit will be paid out.

If you have questions about your family’s eligibility or rights, please contact us. We’ve worked on several MTA Covid death benefit claims and have developed relationships with the MTA. We can get this done for you!

If you want to learn more about how probate works in general, don’t forget to check out my book, “How Probate Works,” available on Amazon.

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