Does a home have to be sold before funds from other investments can be disbursed to the family?
Question Details: My mother-in-law passed away and her estate has just come out of probate. The estate consists of a home (no mortgage), life insurance, IRA, and other investments. My husband wants to purchase the home, but needs to funds to pay off debt in order to qualify for a mortgage loan.
I am not admitted in Washington. I am sorry for your loss.
Generally assets from an estate can be partially distributed once the assets and debts (including estate taxes) are determined, and as long as the money for the taxes and debts to creditors is available. In other words, you can not distribute if there is not enough money to pay out the estate debts after distribution. Life Insurance generally passes outside the estate as long as there is a valid beneficiary designation (other than the estate of course). If your husband wants to purchase the house from the estate he can do so as long as the other beneficiaries are in agreement (and probably with a fight if they are not). What you want is the cash payout from the life insurance, IRA's etc., now for your personal use. You can certainly ask.