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Common Probate Pitfalls and How to Avoid Them

Probate is the process by which an individual’s last will and testament is determined to be valid (or “proved”) so that the decedent’s final wishes regarding estate assets can be settled. Although probate is avoidable in some cases, there are many estates that must be subjected to this process before property can be distributed to heirs and creditors can be paid. Since probate is so common there are many mistakes that personal representatives, also known as executors, of the estate, can make.

Here are a few errors you should avoid:

Waiting Too Long to Begin Probate

Everyone has the prerogative to grieve the loss of a loved one, so nobody reasonably expects the personal representative to open probate right away. However, waiting too long can invite problems. Taxes start to add up and potentially incur interest and penalties. Unpaid creditors get anxious and may threaten legal action. Heirs begin to wonder if something suspicious is preventing them from inheriting what the will promises.

To avoid this, the diligent personal representative will understand all probate requirements, deadlines, and expected timelines. For instance, the estate inventory should be completed and filed within three months of the representative being appointed.

Failing to Keep Accurate Accounting Records

The personal representative is expected to keep detailed records accounting for estate assets. This should be done at every step in the probate process and especially when distributions from the estate are made. In addition to heirs receiving their property, taxes and creditors must be paid. Proper accounting is essential so that questions aren’t raised regarding the representative’s actions.

There are several ways to avoid problems concerning accounting:

  • Act as though everything you do may be reviewed by a judge (because it might)
  • Use a ledger that is dedicated solely to estate matters, not personal use
  • Keep all receipts and records related to disbursements and payments, even if they seem inconsequential
  • Itemize payments and disbursements in the ledger instead of lumping entries together
  • Be sure you account for anything affecting the value of estate assets, for instance by reviewing stock statements

Not Communicating With Beneficiaries

Failure to keep the beneficiaries informed and involved in probate can breed suspicion. Some personal representatives assume that beneficiaries are more patient or forgiving than they really are. But if the heirs believe the representative isn’t doing his or her job well – or, worse, is breaching a fiduciary duty – this could lead to a lawsuit.

Make it a point to regularly email or call fiduciaries, even if there is no change in the probate status. Keep a record of phone calls and other communications you’ve made and what you reported to the beneficiaries. Ask the beneficiaries if they have questions or concerns, and address them to the best of your ability. Also, bear in mind that an attorney can assist with this process.

Distributing Assets Too Early

You may feel pressure from beneficiaries to distribute their inheritances as soon as possible. Some beneficiaries are particularly demanding and may threaten legal action. Keep in mind, however, that creditors have up to one year after the decedent’s death to file claims against the estate. If the personal representative distributes assets too early, he or she could be held liable for any unpaid debts.

It’s important to understand that debts have to be paid before heirs receive their inheritances, even if the asset in question is something relatively simple like funds in a savings account. Resisting the unreasonable demands of beneficiaries can be difficult but it’s part of the representative’s duties. If necessary, inform the beneficiaries of this fact or let an attorney handle communications with them.

Not Retaining an Attorney

A seemingly simple estate can quickly turn complicated as responsibilities add up and interested parties start demanding action. To ensure you are in compliance with the law and to minimize the risk of litigation, it’s a good idea to retain experienced legal counsel. A skilled attorney can handle all aspects of probating the estate and bringing it to a successful resolution.

Learn more from our Probate attorneys at SederLaw. Contact us today to get started!