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Barrister, Attorney
Category: Estate Law
Satisfied Customers: 37820
Experience:  16 yrs estate law, real estate. Wills/Trusts/Probate
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After taxes, fees, etc 5 beneficiaries split 1.5 million equally.

Customer Question

After taxes, fees, etc 5 beneficiaries split 1.5 million equally. However 2 of them recieved advances, beneficiary1 for 175k, beneficiary2 for 25k. Our final distribution documentation reads that each advance was deducted from beneficiary who received advance. And each advance was then divided by 5 and distributed equally amongst the beneficiaries. However I don't understand why the 2 beneficiaries who recieved advances are now getting a portion of the advance back into their disbursement. I always figured the advanced amount would be divided by 4 not 5 in order to balance out the advance. Please correct me if I'm worng.
Submitted: 1 year ago.
Category: Estate Law
Expert:  Barrister replied 1 year ago.
Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question..The reason they they are getting a portion of the advance back as part of their inheritance is because they are paying it back to the estate by the deduction being made from their share so they are considered to have paid the debt off. Then the money that went back into the estate is divided up equally among all the beneficiaries..So for example, if the entire estate split 5 ways is $250K each, and one person owes the estate $200K, and they go to a bank to borrow that money to pay back the estate, that makes the estate worth $1, 450,000. That divided 5 ways is $290K each. .But if the person owes the estate $200K and doesn't borrow to pay it off, that is still an asset of the estate so as to make it have $1,250,000 in cash and a debt owed to it for $200K. So the executor divides it up to $290K each and then subtracts the $200K that the one person owes the estate and they get 90K, the other 4 get $290K each for a grand total of the $1,250,000 that the estate actually has in cash..This is obviously ignoring that the other person owes the estate, but the same type of calculation would be done for them....Basically you add up all the cash and other assets, add in any debts owed to the estate for a grand total, divide it by 5, and then subtract the debts owed from the person who owes it's share...thanksBarrister