Tentative Ruling: Estate of Paterna Dela Vega

Case Number

25PR00292

Case Type

Hearing Date / Time

Wed, 03/25/2026 - 09:30

Nature of Proceedings

Petition for Final Distribution

Tentative Ruling

Probate Notes:

 

Appearances required.

The following is noted for the Court at the hearing:

Extreme reserve request.  Petitioner requested $9,000 for a reserve amount, then lowered that amount to $5,000 after the extreme nature of the request was pointed out in the initial probate notes. 

Petitioner explanation of the high reserve is still required, because it was never explained after the initial probate notes pointed it out. 

The following is from a well-respected treatise on this issue:

Although not required, it is advisable to include an estimate of closing expenses. Examples of estimated closing expenses include any estate taxes, interest, and penalties that will be paid after distribution; the cost of preparing final income tax returns for the estate; the cost of transferring securities to the distributees; the cost of reasonable storage, delivery, and shipping for distribution of tangible personal property to the distributees; and the cost of certifying and recording copies of the decree of distribution of real property. See Prob C §§11642, 11750, 11753–11754. Some courts require more detailed information about the nature and amount of the anticipated closing expenses. See, e.g., San Francisco Ct R 14.35(I)(3).

The personal representative may also wish to retain funds for any undisclosed or unknown liabilities, especially tax deficiencies later assessed against the decedent or the estate. Apart from the reserve for estate taxes, there are some drawbacks to setting the reserve aside specifically for possible future tax deficiencies. Such action indicates—especially if the reserve is a substantial one—misgivings about the validity of the estate's position. The reserve might also be considered a trust fund for payment of the taxes, thus extending the statutory period for assessment. See U.S. v Rose (3d Cir 1965) 346 F2d 985, 989.

In addition, if the personal representative requests that the court allow for a substantial reserve (or even a reserve of more than $5,000), some courts will refuse to characterize the distribution as "final" and will require additional accounts (or waivers) before permitting distribution of any balance of the reserve. For example, in Contra Costa County, the court will not characterize the distribution as final if the personal representative requests more than a nominal reserve. If the entire estate will be distributed to a single beneficiary, such as a trust established during the decedent's lifetime, a reserve may not be necessary.

(Cal. Dec. Est. Pract. (CEB 2023), §31.66.)

As a result of the above authority, it is recommended the Court find this estate not in a condition to be closed f the probable tax liability of the estate is so high as to require the requested amount in reserve.  If the Court allows distribution, the Court should, at minimum, set a review hearing in 60 days and order Petitioner to present a final accounting to show where the reserve was distributed.

Appearances:

The court is open to the public for court business. The court is also conducting hearings via Zoom videoconference.

Meeting ID: 161 956 1423

Passcode: 137305