Until the Final Estate Tax return is filed and the value of the estate is signed off on by the IRS there is always some risk that the IRS will want more taxes (and far more than you have paid the IRS to date).
Thus an executor or trustee often wants to play it safe, and as they go on the hook once they distribute money or estate assets, it is understandable. But some executors and trustees play it far too safe and act unreasonably.
If there was no substantial property that passed as a result of your father's death by beneficiary designation (such as life insurance or an IRA or a 401(k)), or by operation of law (like jointly held real estate) or just before his death by gifts, and all the money is in the trust, it would seem as if the trustee and executor could make a substantial PARTIAL distribution. No estate is taxed at more than 55% of its value.
But if there was insurance paid out, or joint property, or a 401(k), or substantial pre-death gifts, etc. then the professionals may have a legitimate concern that the value of what remains in the estate may not adequately cover the tax liability. By paying anything out they'd incur risk of liability for the estate tax the IRS ultimately concludes is due.
