Estate Distribution Before Death: Legal and Ethical Considerations

The question of distributing a portion of a deceased person's estate to named beneficiaries while they are still alive can be fraught with legal, ethical, and practical issues. In the context of a 97-year-old mother with dementia, such a move must be handled with utmost care and consideration. This article delves into the legalities, ethical concerns, and potential outcomes of such actions.

Legal Implications

Before any assets can be distributed, the estate must undergo probate, which is a court process to ensure that the deceased's wishes are carried out as stated in their will. As one commenter pointed out, it is illegal and unethical to distribute a portion of the estate to beneficiaries while the person is still alive, especially if the individual is incapable of making such decisions due to age or mental incapacity like dementia.

The answer is no, it's against the law. The estate has to be probated, and that cannot be done until death occurs. A will is just a wish list until that person dies. Even if contested, it doesn't mean much.

As the guardian or executor of the estate, you may hold assets in a trust or personal account to ensure that the elderly individual can live comfortably during their remaining years, but any distribution to beneficiaries must wait until the passing of the individual. Unauthorized distribution could result in legal complications and charges of theft or elder financial abuse.

Ethical Considerations

Despite the legal hurdles, some argue for the ethical benefits of allowing beneficiaries to receive a portion of the assets sooner, especially if it provides them relief and comfort. This could help beneficiaries appreciate the estate's value and may lead to a smoother distribution process after death.

It's a good idea to give the beneficiaries some money in advance. This could make the downsizing process easier both for your mother and the beneficiaries themselves, knowing they will receive a portion of the assets at death.

However, the ethical dilemma remains whether it's right to make such decisions for someone who is unable to understand the consequences of their actions. If your mother suffers from dementia, any decision should be made in consultation with legal and medical professionals to ensure that her rights and best interests are upheld.

Practical Solutions

While distributing a portion of the estate is not advisable while the individual is still alive, there are other steps you can take to ensure that your mother's needs are met:

Estate Planning: Ensure that her estate is properly planned and that a valid will exists. If there is a Power of Attorney (POA), use it responsibly and ethically to manage her finances and assets. Legal Consultation: Seek the advice of an estate attorney to understand the legal and ethical implications of any actions you might take. Some jurisdictions may have specific laws or ethical guidelines regarding the distribution of assets before death. Ongoing Care: Continue to provide for your mother's care and well-being, ensuring that she can live as comfortably as possible within the constraints of her condition.

If your mother's estate includes stocks or real estate, be aware that the basis for these assets will be stepped up to the date of death. This means there is a potential to avoid capital gains taxes. Consulting with a financial planner before making any decisions is crucial to understand the full implications of estate distribution.

Conclusion

While the idea of distributing a portion of the estate to beneficiaries before death might seem appealing, it is fraught with legal and ethical challenges. It is important to respect the legal processes and ensure that the wishes of the deceased are carried out properly. Consult with legal and financial professionals to navigate the complexities of estate planning and ensure proper distribution after the individual's passing.