At its roots, probate is simply the public process of settling debts and distributing assets upon death. If a will has been made, the designated executor handles the process in accordance with state probate protocols. Absent a will, the court appoints an administrator, who settles affairs based on the state laws of intestacy. In either case, by following this expert advice, probate mistakes can be prevented.
Though it strikes us during grief, making it feel extra stressful, probate in and of itself is nothing to be scared about: it is just the legal, public process that settles following a death. Expedited processes are even provided in most states, based on the level of assets involved. When families are communicating and have had a chance to get organized, probate generally proceeds smoothly. Nonetheless, executors and administrators (sometimes referred to as representatives), are likely to find themselves busy with their duties, and the probate process can take some time—a year or so is fairly common. Recognizing that executors and administrators can easily become overwhelmed, attorneys at Frank & Kraft advise avoiding these mistakes:
- Failing to secure assets. One of the first things an Executor should do is secure all known assets. This may be as simple as closing a financial account or as complex as winterizing a vacation home; however, failing to properly secure assets could lead to a decrease in the value of the asset.
- Failing to properly classify assets as probate or non-probate assets. Because not all assets are required to go through probate it is essential to categorize assets before beginning the probate of an estate. Non-probate assets bypass probate and can be distributed to beneficiaries immediately.
- Failing to use a small estate procedure if the estate qualifies. Formal probate can take over a year to complete and can be expensive. Most states offer a small estate alternative to formal probate for estates that qualify. Failing to check whether a small estate alternative is available could cost the estate time and money.
While the steps of probate unfold, it is very important for executors and administrators to keep communications flowing to beneficiaries, creditors, other interested parties and the court. Silence can lead to misunderstandings, conflicts and even probate litigation.
Attorney Richard Humiston of Frantz Ward points out that the ability of an executor to commit time and follow through with duties is critical for the smooth closure of an estate: “An effective Executor understands that their actions can have a significant impact on how quickly and accurately the estate is administered. This individual must be willing to be diligent in the identification and distribution of assets, and timely in their interaction with the Court.” Especially if complications and conflicts threaten, it’s generally best to swiftly engage the services of an experienced probate lawyer Here are two other mistakes attorneys caution against:
- Failing to properly notify creditors or review creditor claims. When you oversee the probate of an estate you must notify beneficiaries, heirs, and creditors that probate is underway. Known creditors should be notified personally while unknown creditors are notified via publication in a local newspaper. When claims are filed, you must review those claims and approve or deny them. Failing to notify creditors or review claims could be a costly mistake.
- Distributing assets early or without regard to priority. Before probate assets can be distributed to beneficiaries or heirs of the estate, you must pay approved claims against the estate. In addition, any estate taxes due must be calculated and paid and the costs of administering the estate must be paid. These expenses usually take priority over gifts made or intestate succession rules. Therefore, distributing assets too early or failing to abide by the order of priority can jeopardize the estate.
Good To Know: Executor and Administrator Bonds
Executors and administrators are fiduciaries and have the legal obligation to protect the interests of the estate and its beneficiaries in accordance with state law. As a guarantee, courts often require a bond, known as probate, administrator or executor bonds. As a leading national provider of all types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain court required bonds. Just get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even before leaving probate court or the law office.
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