If you recently lost a loved one and learned that you were named by the decedent to be the Executor of the estate, you are probably feeling a bit overwhelmed. Even with the best of intentions, mistakes can occur – especially if this is the first time you have served as an Executor. The Beverly probate attorneys at DeBruyckere Law Offices want to help you by discussing the top five probate mistakes you want to avoid making.
What Is Probate?
Before focusing on common mistakes, it may be beneficial to learn a bit about the probate process and why it is required. When an individual dies, he or she leaves behind assets. Those assets make up the decedent’s estate. Probate is the term given to the legal process that eventually transfers those estate assets to the intended beneficiaries and/or heirs of the estate. Probate also serves other functions, including:
- Authenticating the decedent’s Last Will and Testament if one was left behind
- Identifying, locating, securing, and valuing estate assets
- Locating legal heirs of the estate if the decedent died intestate, or without a valid Will
- Allowing creditors the opportunity to file claims against the estate
- Litigating any challenges to the Will or estate
- Ensuring the taxes owed by the estate are paid
5 Probate Mistakes You Can Avoid Making
If you are acting as Executor for the first time, it can be very easy to make a mistake. One way to try and prevent making a mistake is to learn from the mistakes of others. With that being said, five of the most common probate mistakes for you to try and avoid include:
- Failing to recognize non-probate assets. Not all assets are probate assets. Non-probate assets bypass the probate process altogether and, therefore, may be distributed to beneficiaries immediately after the decedent’s death. Trust assets, certain types of jointly held property, and proceeds of a life insurance policy are just a few examples of non-probate assets. Failing to properly categorize assets can hold up the entire probate process; particularly if the estate might otherwise qualify for small estate administration.
- Failing to recognize that the estate qualifies for small estate administration. Most states offer a small estate administration alternative to formal probate for estates that qualify. If the estate qualifies for small estate administration it will save both time and money; however, you must recognize fairly quickly that the estate may be eligible for this option for the estate – and beneficiaries – to benefit from avoiding formal probate.
- Distributing assets too soon. As the Executor, you have the authority to approve creditor claims and pay creditors as well as to distribute assets to intended beneficiaries. Sometimes, however, an estate does not have sufficient assets to pay all claims and honor gifts in a Will. When that is the case, creditors must be prioritized according to law and assets distributed according to that priority. If you fail to follow the law and distribute assets accordingly, you could be held personally liable.
- Failing to properly calculate federal gift and estate taxes. Every estate is potentially subject to federal gift and estate taxes. In addition, some states also impose a state level gift and estate tax. You should make an initial determination at the beginning of the probate process as to whether the estate is likely to owe gift and estate taxes. By doing that, you are in a better position to review claims against the estate down the road in the event that the estate lacks sufficient assets to pay all claims.
- Failing to consult/retain professionals to help. If you have never before served as an Executor it is not wise to try and probate an estate without the assistance of legal, and other, professionals. The probate process often requires at least a basic knowledge of legal and financial concepts that the average person does not have. Hiring an estate planning attorney, an accountant, and other professionals can be the key to avoiding damaging errors.
Contact Beverly Probate Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional concerns about avoiding probate mistakes, contact the Beverly probate lawyers at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.