Can more taxes be collected than the estate is worth?

[HerFalls]

What is the name of your state (only U.S. law)? Washington State
My father died and there are various funds, (mutual, certificates, IRA's etc.) in his estate. The will is now in probate. Some of the funds have beneficiaries and are available apparently to us, his children as beneficiaries, immediately, and we are told they don't need to go through probate.
At one time my father collected money from a lawsuit and was advised by a tax attorney that he probably wouldn't need to worry about paying taxes on the money because of the reason the money was awarded to him. But, just in case, the attorney said it would be best to set money aside to pay the taxes. Dad's accounts remaining in the estate, at this point, do not have enough money in them to cover the taxes and penalties, if they occur.
My question is this: If taxes are needed at some point and there isn't enough money in his estate left, will it be necessary for the beneficiaries to pay the difference, even though we are told that the money available now is not part of the estate? Do we need to give that back?
My brother the executor wants us all to set aside an amount in case we need to. But, if it's not part of the estate it doesn't seem correct.
What does everyone think?What is the name of your state (only U.S. law)?

 

[LdiJ]

What is the name of your state (only U.S. law)? Washington State
My father died and there are various funds, (mutual, certificates, IRA's etc.) in his estate. The will is now in probate. Some of the funds have beneficiaries and are available apparently to us, his children as beneficiaries, immediately, and we are told they don't need to go through probate.
At one time my father collected money from a lawsuit and was advised by a tax attorney that he probably wouldn't need to worry about paying taxes on the money because of the reason the money was awarded to him. But, just in case, the attorney said it would be best to set money aside to pay the taxes. Dad's accounts remaining in the estate, at this point, do not have enough money in them to cover the taxes and penalties, if they occur.
My question is this: If taxes are needed at some point and there isn't enough money in his estate left, will it be necessary for the beneficiaries to pay the difference, even though we are told that the money available now is not part of the estate? Do we need to give that back?
My brother the executor wants us all to set aside an amount in case we need to. But, if it's not part of the estate it doesn't seem correct.
What does everyone think?What is the name of your state (only U.S. law)?

How long ago did your father collect the settlement money?

 

[racer72]

If you father's estate is big enough that taxes may have to be paid, you and your siblings need a probate attorney now. Not tomorrow or next week. Any taxes must be paid within 9 months after death. The taxes are based on the amount of the estate valued over 2 million dollars. There are also federal tax liabilities if the estate is valued over one million dollars. At a minimum, you guys need to talk to a local probate attorney.

 

[tranquility]

Even though accounts with a beneficiary may transfer without court order, they are still part of the estate and are liable for estate expenses, including taxes.

 

[davew128]

What is the name of your state (only U.S. law)? Washington State
My father died and there are various funds, (mutual, certificates, IRA's etc.) in his estate. The will is now in probate. Some of the funds have beneficiaries and are available apparently to us, his children as beneficiaries, immediately, and we are told they don't need to go through probate.
At one time my father collected money from a lawsuit and was advised by a tax attorney that he probably wouldn't need to worry about paying taxes on the money because of the reason the money was awarded to him. But, just in case, the attorney said it would be best to set money aside to pay the taxes. Dad's accounts remaining in the estate, at this point, do not have enough money in them to cover the taxes and penalties, if they occur.
My question is this: If taxes are needed at some point and there isn't enough money in his estate left, will it be necessary for the beneficiaries to pay the difference, even though we are told that the money available now is not part of the estate? Do we need to give that back?
My brother the executor wants us all to set aside an amount in case we need to. But, if it's not part of the estate it doesn't seem correct.
What does everyone think?What is the name of your state (only U.S. law)?

In addition to the other correct responses, these are questions that should have been asked BEFORE assets began to be distributed, even the non-probate assets.