Distributing bequests to beneficiaries before paying IRS costs an executor, according to a court ruling.
The executor of a big estate knew additional estate taxes would be due after IRS audited the Form 706. He signed an agreement with IRS consenting to have the agency assess and collect a $200,000 estate tax deficiency. A few months later, he had the estate distribute property to himself and another heir for no consideration, which left the estate with no assets to pay its tax debt.
That makes the executor personally liable for depleting the estate
Kohls, D.C., Ohio