is my inheritance being held up due to incompetence?
April 5, 2011 9:50 PM   Subscribe

My dad passed away 18 months ago, and the executor's lawyer informs me they're still awaiting a foreign beneficiary's obtaining their tax id in order for final distribution of his estate to be made. Is this a reasonable delay? details inside.

My father had several pieces of real estate, all of which were liqudated for estate distribution purposes - two in FL, his final state of residence, and one in NYC - a co-op that didn't sell until last Nov. When I asked the executor for an update a month ago his lawyer emailed me that "we are almost
> completed and we are waiting for one more foreign beneficiary to secure their
> tax number from the IRS so that the final tax returns can be completed. 
> Once we have the last tax number we will be able to initiate the closing out of
> the Estate and the distribution of all assets to the beneficiaries. 
." Am I insane or shouldn't it have been his goal from the start to ensure the beneficiaries had those numbers, i.e. haven't they had eighteen months to do this?

The reason I ask is that I suspect this lawyer was selected by the executor for personal reasons and may not be as knowledgeable as initially outlined. My personal concern - besides needing the money - is I do NOT want to miss out on what I believe will be an AAPL explosion following WWDC - and so the bonus question is, do I have a case for lack of due diligence / mismanagement should I be able to document a missed opportunity to make e.g. 100k in three months.
posted by cps to Law & Government (12 answers total) 1 user marked this as a favorite
haven't they had eighteen months to do this?

Not necessarily. If you've had a SSN since birth, then you're not going to be aware of the rigmarole of getting into the system. ITIN applications for non-resident aliens are particularly tricky, because they either have to be accompanied by a completed tax return or a request for an exception from the filing requirement, and the IRS will only allocate a number once it's satisfied that the applicant qualifies.
posted by holgate at 10:08 PM on April 5, 2011

In my personal experience with pretty uncomplicated estates that seemed to be reasonably well handled, 18 or so months isn't outrageously long to complete the whole affair. All you can do is be patient.
posted by gubenuj at 11:42 PM on April 5, 2011

and so the bonus question is, do I have a case for lack of due diligence / mismanagement should I be able to document a missed opportunity to make e.g. 100k in three months.

Probably not. At best (IANAL) you could possibly argue that you should get some kind of standard interest award for the amount of time between when the matter should been closed and when it actually was. Otherwise everyone would just say "but I would have made a zillion dollars if I had the money sooner." Even getting interest would be a real stretch, as estates take a long time to settle and it sounds like the lawyer would have a reasonable explanation for his actions. International tax matters are complex, and you don't know whether this remaining beneficiary has been avoiding the problem for months. Filing a lawsuit and trying to get damages would likely cost quite a bit even if you prevailed. It sounds like they are increasingly close to being done in any case.

I'd also encourage you to be cautious with your investment strategy. What if the market isn't impressed with WWDC for whatever reason and the stock drops 20%? Or what if it's announced that Steve Jobs is sick (or *gasp* dies) or the iPhone 5 is delayed due to difficulty sourcing parts from damaged Japanese factories? I have no idea how much money the inheritance involves nor all your plans, but a 100K return on AAPL in three months is going to require an awfully sizable investment and/or a pretty massive change in the stock price. You say that you "need the money." Can you afford to lose half of it if this strategy goes south? What about all of it? I'd strongly encourage you to discuss the risks and potential rewards with a professional investment adviser before dropping this much money into a single tech stock.
posted by zachlipton at 11:44 PM on April 5, 2011

Thanks for the answers and I'll be more patient.

To zach: the specific context would be a (pgp-signed, bcc-ed to various folks, encrypted, date- and time-stamped messages posted on various usenet groups, etc.) "now is when i'd be buying $50k AAPL)" and a "now is when I'd sell", not a hindsighted "but i coulda made a zillion buying MSFT!" - of course.

And yes, apple will dip when steve kicks, but will soon pick back up. iphone 5 delays due to tsunami-affected parts factories ftw, forget all of that stuff --

it's their integration of siri tech into ios (and possibly, later on maybe, osx) that will double thheir stockprice near-overnight (while still being miles from my halfdeveloped guiasconverstion / useragents as in night watch / your plastic pal who's fun to be with trainable helper monkey intermediary to any OS / automated phone system / car stereo with bluetooth controls / etcetcetc, it will still piss me off)
posted by cps at 2:07 AM on April 6, 2011

no wait, hold on a goshdarn sec here.

gubenuj, pretend i'm an idiot. Let's say my dad had died with two, us based, beneficiaries, and only a cash bank account. Surely that could wrap in a month, maybe two at the outside? Add in a ninety day period for potential creditors to make claims, maybe, but still, 18 months?

I'm still not quite getting how, five months after the cashiers check for the sale of the final piece of real estate was deposited into the estate account, we're still waiting for "stuff to happen".

Partly this is due, I'm sure, to the tone of the executor when I asked him - it sounded like it was only after that sale the executor and his lawyer found out they would need the foreign beneficiary to get an ITIN.

What would the options be if such a foreign beneficiary refused to apply for an ITIN, or was taking an excessively long time to do so?

Thanks for taking the time to read and answer this BTW, I realize I'm coming off sounding kinda demanding here...
posted by cps at 3:10 AM on April 6, 2011

Let's say my dad had died with two, us based, beneficiaries, and only a cash bank account. Surely that could wrap in a month, maybe two at the outside? Add in a ninety day period for potential creditors to make claims, maybe, but still, 18 months?

I work for an attorney who does estate work in New York State. It usually goes something like this:

If there's a will, it needs to be submitted for probate to the county Surrogate's Court, along with other paperwork to prove the will's validity (death certificate, list of beneficiaries, list of anyone who might be entitled to a bequest if there *wasn't* a will, an affidavit by the people who witnessed the will stating that the will was not signed under duress, etc.).

Once that's submitted to the Surrogate's Court, it can take any amount of time to get the Letters Testamentary (a document stating that the will was valid and that Jane Doe has been appointed as Executor of the Will). You can't start doing anything without this document, and when you get it depends on how busy the Court is.

Once you've got that, and your Executor has the Estate's bank account set up, then begins the process of looking for and clearing out any accounts. Almost no one has just a cash bank account. There are life insurance policies, 401(k)s, multiple bank accounts, pensions. Each of which requires different paperwork and different documents that need to be signed by different people, that need to be sent out to different locations in different states.

Even once all the money has been found and accumulated into the Estate account, you need to make sure, like you said, that no creditors come forth with claims. Each state has a different time frame - in New York, it's not ninety days, it's 7 months.

Once all those hurdles have been cleared, then you can do a final distribution, and close the estate.

I can show you my father-in-law's estate, that I'm helping to work on, as an example. Fairly straightforward (he left three children and a brother as his beneficiaries, had his bank accounts neatly lined up and accounted for, he owned his house outright that one of his sons is buying from the estate). We're entering month #6 and things are still not completely settled.

If you're really antsy to get some money, you could appeal to the Executor to possibly do a partial distribution of funds.
posted by Lucinda at 5:09 AM on April 6, 2011 [1 favorite]

Lucinda - wouldn't that be Latin for She Who Must Needs Be Lucid? In any case, that was clear and helpful, and I'll look into the partial distribution thing.
posted by cps at 6:07 AM on April 6, 2011

Even if you had proof that you would totally have bought a particular stock on such and such a date, I don't think that would be convincing. The market price is the price the world thinks the stock is worth. You aren't taking any risk if you don't buy the stock--if it doesn't end up performing like you thought it would, you can choose after the fact not to try to claim damages. So let's say if you would have bought a stock, but you couldn't, because the estate wasn't closed, and the stock goes up a bunch, you sue, but if the stock tanked instead of going up...what then, would you owe the executor money?
posted by phoenixy at 6:20 AM on April 6, 2011 [1 favorite]

hmm good point. well no i wouldn't but they could claim to owe me less, e.g., the hypothetical stock buy of $50k would now be worth say $10k, so if the original amount were $100k i'd instead get $60.

In fact if I could I'd instruct the executor to take $50k of my share the day before WWDC and buy the stock. But if they could do that they could give me my money instead...

I get the legalities, but on some level it still doesn't quite compute for me that 1) they have the cash 2) they know, and I know, how much is mine but 3) I can't get it, for going on six months now. Give me mine now and sort the European out later, right?

He was a wonderful man and he lived a long and happy life but dammit I'm bumming smokes, late on rent and I want my iPad 2 already!

(you're not the a.f.raw phoenix by any chance?)
posted by cps at 8:17 AM on April 6, 2011

I recently inherited a very small percentage of a relative's small estate. She died 4 years ago, but her house didn't get sold until last year. My cousin just told me that because the value of the house on the day she died was more than it sold for four years later I get to do some loss write-off on my taxes. Check into that for your situation.

Who are these foreign beneficiaries anyway? Did he leave money to relatives in other countries?
posted by mareli at 8:57 AM on April 6, 2011

not relatives just friends, i'm the only blod relation.
posted by cps at 9:01 AM on April 6, 2011

CPS, if you are dead certain AAPL will rise significantly after WWDC, instead of buying Apple stock you should make a leveraged bet instead. You can buy the option to buy Apple stock on June 11 at $400/share for
only $1.78 today.
That would be a 211x return if you're right and it actually doubles in price (e.g., $250 in options would be equivalent to 50k in stock doubling). On the other hand, if the stock price doesn't increase above $400 by June, your options would be worthless. The price of these options means that the rest of the market (myself included) thinks you are very, very wrong, but don't let that deter you! You really don't need your full inheritance to make bets with such long odds.
posted by zxcv at 2:36 AM on April 7, 2011

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