Typically, calculating a distribution from a will, in a common estate, is a result of poor estate planning. If an executor needs an analysis pad to figure out a distribution involving many beneficiaries, the estate plan has the following flaws:
- There are too many beneficiaries in the estate plan.
- The estate plan has a complicated distribution formula.
In the article The Estate Income Tax Returns: Execute the Plan, calculating the distribution written in the will forced me, as executor, to use an analysis pad, then an excel spreadsheet. The distribution formula consisted of twenty beneficiaries receiving different amounts of property calculated in percentages and shares. In fact, the complicated distribution formula took me a few drafts to get to a final draft. After completing the final draft on an excel spreadsheet, to make sure the distribution calculation was accurate, I emailed the spreadsheet to my attorney and the tax professional. The professionals reviewed the final draft and approved the distribution. Finally, after the review, I was able to distribute the property to the beneficiaries. In addition, the spreadsheet of the final draft became the template for the next distribution.
Although the distribution worked out well, an executor of a common estate should never have to calculate a complicated distribution. Therefore, calculating a distribution from a will should rarely be necessary.
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If you have a common estate and plan to distribute property through your will, plan a simple distribution. There is no need to force your executor to flow chart the beneficiaries and solve a complex algorithm to distribute property as depicted in the article Why is Calculating a Distribution from a Will Necessary?. In addition, complex distribution instructions increase expenses of the estate by forcing the executor to use outside help. So, to avoid giving your executor needless headaches and inflating expenses of the estate, plan a simple distribution.