Generally speaking, there's no set time limit for how long an executor of a living trust has to dispense of property. However, courts and individual state laws have upheld that an executor must settle an estate within a reasonable time. For this reason, most states haven't enacted a specific statute of limitations for these types of cases. Instead, the overseeing judge makes determinations on a case-by-case basis.
Estimated Time Frame
For smaller estates that are uncomplicated, executors typically can settle them within three to six months. If the executor runs into any problems with fulfilling the requirements of the living trust, the case can take longer. For example, in cases where large estates are involved, numerous debts need to be paid to creditors or beneficiaries are difficult to locate, it can take the executor up to several years to get the job finished. In cases where probate is involved, it can take even longer.
Benefits of a Living Trust
Many prefer living trusts because of the benefits associated with them. With regards to property, as long as that property was placed into the living trust before the owner's death, the case won't require going through probate. Probate can be a costly and lengthy process that is best avoided, if at all possible. With probate, most states allow the executor up to four years to file for probate and then several more years to handle the estate. Another benefit of a living trust is it can help reduce estate taxes.
The executor has the responsibility to make sure that everything related to the estate is taken care of in a proper manner. This means creditors need to be notified, debts need to be paid, taxes need to be filed, beneficiaries need to be located and assets need to be distributed accordingly. Any property that is involved in the estate can be distributed only after all other debt obligations are taken care of, which can take up to several years in complex cases.
When it's believed that an executor of a living trust isn't living up to his responsibilities within a reasonable amount of time, interested parties can file a petition with the court to have the case reviewed. Once a petition is filed, the executor needs to submit all accounting records associated with the estate to the court, which looks for signs of mismanagement. If the court finds the executor mismanaged the estate, further legal action may be taken. Also, if the executor is found to be mismanaging the estate, a petition can be filed for his removal.
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