Overview
Estate planning attorney Paul Rabalais outlines 12 common mistakes made by executors during the probate process and provides practical guidance on how to avoid each one.
Common Executor Mistakes
1. Delaying the Probate Process
- Executor procrastination adds significant delays to probate, causing frustration for all involved parties.
- Timely action on all required tasks prevents the process from unnecessarily extending.
2. Distributing Estate Funds Too Early
- Disbursing cash before settling debts can create financial shortfalls, requiring returns from heirs or asset liquidation.
- Executors must ensure all obligations are met before any distributions occur.
3. Failing to Make the Portability Election
- Not filing an estate tax return for portability within nine months of a spouse’s death can result in costly tax consequences.
- Portability allows the surviving spouse to claim the deceased spouse’s unused estate tax exclusion.
4. Not Following the Terms of the Will
- Executors must distribute assets strictly as the will dictates, not based on verbal wishes outside the will.
- Ignoring the will’s terms can cause disputes and legal challenges from beneficiaries.
5. Failing to Disclose All Estate Assets
- Omitting assets leads to reopening the estate and additional legal work.
- Conducting exhaustive searches and reviewing financial documentation prevents missed assets.
6. Poor Communication with Heirs
- A lack of updates breeds distrust and potential legal disputes among heirs.
- Regular, transparent communication reassures beneficiaries and maintains trust.
7. Confusing Probate and Non-Probate Assets
- Executors often misclassify assets like IRAs or life insurance, complicating the settlement.
- Identifying which assets pass outside probate is essential for proper administration.
8. Not Depositing Estate Funds into an Estate Account
- Mixing estate funds with personal accounts can result in penalties and personal liability.
- Estate funds must be handled through a dedicated estate account.
9. Relying on Unqualified Helpers
- Using friends or non-specialist attorneys can lead to costly errors.
- Seek professional assistance experienced in estate matters.
10. Ignoring Estate Creditor Claims
- Failing to address legitimate debts can make the executor personally liable.
- Executors must pay or settle valid claims before distributing assets.
11. Self-Dealing by Executor
- Executors cannot profit by acquiring estate assets below market value.
- Accepting formal executor compensation is the appropriate method for remuneration.
12. Mishandling Tangible Personal Property
- Executors must equitably divide personal items, not based on personal preference or informal agreements.
- Collaboration and documentation among heirs help avoid disputes.
Recommendations / Advice
- Executors and administrators (when there is no will) should avoid these 12 mistakes to ensure a smooth and fair estate settlement.
- Open communication, strict adherence to legal and fiduciary duties, and seeking professional help are critical for effective estate administration.