hey there estate planning attorney paul rabalai here and in this video we're going to talk about 12 mistakes that executors make and how to avoid those mistakes so if you've been named as an executor congratulations or if you've named someone else as the executor of your estate or if you're considering naming someone as the executor of your estate you're going to want to watch this video because this is going to lay out the 12 most common mistakes that executors make and you either can avoid those mistakes if you are an executor or you can appoint someone who's not likely to make these mistakes all right so i will start by saying the probate process in general gets a bad rap kind of justifiably so a lot of bureaucracy a lot of red tape lawyers involved judges involved lots of delays that contribute to the probate problem but oftentimes a major problem in the in in in getting an estate complete is executive problems so i'm gonna go through 12 mistakes that executors make and how to avoid them and we're going to jump right in we're going to go kind of fast and quite frankly i think what i'll do is i'll i'm going to describe and and tell you in the video how to avoid them but in the description below i'll list out just real quick the 12 mistakes the first one just delay um probate takes a long time lots of steps lots of delay and when the executor delays it just adds to the overall delay of probate which frustrates everybody think about it if an executor has maybe 20 tasks to do as part of settling an estate and in each task they you know they kind of they're busy they've got other stuff to do so in each task that they have to do they kind of mess around for about three weeks so each task is delayed for three weeks well that's just the executor delay right there is going to add a year to the probate process not to mention all of the other delays that are inherent in completing a probate so make sure you stay on top of things if you're an executor number two is paying out the funds too early heard so many times before uh start up start a probate get the call hey paul i'm the executor my sister she's kind of in a jam and she wants to know if you know she can have some of her inheritance so you know here's what here's what i'm going to do i'm going to there's some cash in the estate and there's four of us uh heirs and my sister's willing to jam so we're gonna just distribute all the cash in the estate and and you know we'll worry about all the other assets later and then you know come uh maybe weeks months or even years later there's that cash is needed for the estate it's needed to pay debts of the estate it's needed to pay property tax on a piece of property in the estate it's needed to pay taxes that were due perhaps on a final income tax return it's needed to pay attorney's fees it's needed to pay executor fees so and and then what do you do then you have to maybe unnecessarily liquidate other assets or in circumstances you may have to go back to those four people that you distributed cash to and say hey you know what i didn't realize we need that cash and so can can you give it back to the estate because we needed to to move things along on the estate settlement process and quite frankly if you distributed it to a sister who was kind of quote in a jam you think she's gonna have that cash no she used it to get out of her jam so big problem if you pay out funds too early number three is the portability election my guess is um is or not making the portability election is the mistake my guess is that if unless you're on a state attorney who's fairly well versed in the estate tax aspects of estate settlements you probably have no idea what portability is but lack of failing to make the portability election might be the biggest mistake it could be the most costly mistake that an executor could make i'm going to link you to a video right up there that talks about the portability election and that video was made before we have this new administration which could cause the problem to be even worse the main main concept behind portability is when the first spouse dies you have a married couple first spouse dies the executor of the first spouse to die as a state can file an estate tax return even if it's not necessary make this portability election so that the surviving spouse not only gets the surviving spouse's estate tax exclusion amount but they also get the first spouse to die's unused estate tax exclusion amount and with the new administration and the possibility of the estate tax exclusion amount for that surviving spouse going down to maybe who knows maybe three million dollars or so it may be a big big mistake not to make the portability election within not within the you know time timeliness of nine months after the death of the first spouse to die so again watch the video that i've linked and and you'll learn everything you need to know number four mistake number four not following the terms of the will i've had people come to me and say you know what i'm the executor mom told me she wanted each of the grandchildren to get ten thousand dollars each there's twelve grandchildren even though she didn't get around to putting it any of that in her formal legal documents so since i'm the executor and i've got control of mom's cash i'm just gonna go ahead and make sure i honor her wishes and pay out the ten thousand dollars to each of those grandchildren not so fast that's a problem because the people who would have received that 120 000 they're likely to say where's my money and you know under what authority do you have to to give my money to somebody else and then you're going to be stuck saying well that's what mom told me but you had no basis for doing that based on what mom told you you got to follow the terms of the will mistake number five failing to provide all of the asset information if there's one executive mistake that probably irks me the most it's this one it's it's you know we complete an estate so much paperwork so much delay so much hassle we finish it and then we're like we know we're done we're like whoo okay we finished that one and then here comes the email here comes the phone call you know what mr rabelai we didn't know it but we found this additional bank account that my father had or we found these shares of stock that my mother had and we didn't even know so we didn't tell you about them or you know what mr rabelais we forgot to tell you about this piece of property that's been in my mother's family for years and you know now they're trying to sell it and i realize the estate is over what do we do and at that point i want to just kind of shoot somebody because now we've gotta kind of go back in start all over as to that piece of property that asset that account that those shares of stock would have been so much easier to have just addressed it with all of the other assets in the estate but now that things are concluded we gotta go back we gotta reopen make sure you provide all of the appropriate kind of asset information do an exhaustive search of records and the mail that's coming in and the 1099s and the tax returns so that you can provide all that asset information and not have to go back and redo things mistake number six the executor's failure to communicate there is just just trust me trust me on this one there is something about an executor failing to communicate with the heirs that makes the heirs extremely nervous so um paul my brother is the executor and he's just not communicating i'm starting to wonder whether he's skimming some things off the top or it could be even worse paul my sister is the executor and she is not returning my texts my calls my emails and that makes people fear the worst and makes them all lawyer up it it can just ruin relationships moving forward on the other hand when an executor communicates openly with all of the errors that's so easy to do with email these days and scans and all that and executor you know sends out periodic emails here's all the assets here's the statements of the financial accounts of the person who passed away here's what i know here's our plan moving forward it just makes all of those heirs relax and say okay we got this under control the executor is providing you know all of the information that they have they're not trying to hide anything i know this is going to be done right so really make sure you communicate mistake executor mistake number seven is confusing probate assets with non-probate assets give you a couple of examples iras as long as they have designated beneficiaries which they do you know 99 of the time unless somebody fails to designate beneficiaries it's not it's not an asset that the executor has to deal with it doesn't go on any of the um probate lists of assets it's handled all outside of the probate the designated beneficiaries um complete some paperwork with the financial institution wherever that retirement account or ira is held on the financial institution with will deal with those beneficiaries directly that's handled outside of probate life insurance it gets tricky with life insurance nobody ever understand it so if dad had a life insurance policy and he named his four kids as the beneficiaries then when dad dies it's not a probate asset then the four kids will work directly with the life insurance company and the life insurance company will cut checks to the four beneficiaries that's all out of the outside of the state however with life insurance sometimes dad could be an owner of a policy but he's not the insured on the policy maybe he had a policy on his wife or maybe he had a policy where the kids were the insured and dad's the owner now that life insurance policy is part of dad's probate estate because he was the owner and he was not the insured so we've got to list it so that uh as it goes through the probate process the ownership of that policy gets transferred uh to to dad's appropriate heirs so a lot of confusion out there about probate and non-probate assets mistake number eight is not collecting estate funds in an estate account have have had it told to me numerous times before you know what mr ramallah i was a signer on mom's account and after mom died i was i was worried that the bank might freeze the account so i went took all the funds out of mom's account and i put all those into my account is what somebody might say don't do that so it just it just looks bad even even with the best intentions that looks bad so in addition to that there's some there's some pretty stiff penalties that at least there's one in my state where i work in louisiana that says an executor shall deposit all the estate monies in an estate account and if they don't then a judge can render a judgment against the executor personally for 20 interest annually on those funds that were not deposited into an estate account and the fact that they don't deposit the state funds into an estate account is also grounds for them for the executor to be dismissed from office so make sure you collect funds in an estate account don't put them in your own own account just kind of for safekeeping and for holding mistaken executor mistake number nine getting help from friends instead of professionals this is the old you know what um mr rabelais my uncle died he named me as the executor and my second cousin's friend's stepfather is a lawyer and he had handled a divorce and a car wreck for for the family and he seemed to do a pretty good job so we called that lawyer because he's a lawyer to handle the estate and you know what boy was was he in over his head and then he finally kind of admitted that he made some mistakes and and he didn't do this regularly so um a lot of lawyers out there including myself have had to clean up the messes of others so make sure you get professional help instead of friend health all right executive mistake number 10 is ignoring claims against the estate it is common for people to pass away and have outstanding debts or credit card bills or medical expenses and oftentimes those creditors will let the executor know that they are due funds from the deceased or from the estate of the deceased you can't ignore those i'll just come you know if you ignore those you might be personally liable for those debts to the extent that the debt is valid and the estate doesn't take care of the debt so don't ignore debts of the estate mistake number 11 is self dealing can't do it um you know dad dad may have had this beautiful bmw that was only a year old and maybe your thought process is you know what i'm the executor and i'm doing this and and maybe maybe i'm due you know a little favor from the estate so i realized dad's bmw was worth you know fifty thousand dollars but um i'm sure dad would have liked for that bmw to have stayed in the family so as the executor i'm just gonna i'm gonna buy that bmw from the estate for one thousand dollars and uh and then we'll you know deal with the rest of the assets that probably won't fly too well uh particularly over the remaining you know 10 years where where the other airs see you cruising around town and that nice bmw that you bought for a thousand dollars when it could have been sold for maybe 50 000 and that money would have been divided up among the heirs so so there's some major problems with self-dealing as an executor don't do it by the way as an executor you're entitled to compensation from the estate so if you feel like you've you've earned something special from the estate perhaps you should accept the executor compensation that you're entitled which can vary from state to state and the terms of the will may address executor compensation as well last but not least executive mistake number 12 is handling the tangible assets under your own terms so you know if if somebody has a dies and they have a bank account with a hundred thousand dollars in it and there's four errors they're equal errors pretty simple each air gets twenty five thousand dollars but when there's foreigners and there's some tangible personal assets kind of like the like the piece of furniture over my left shoulder or the photos of my kids over the right shoulder or maybe even um a really expensive piece of art that hangs on the wall even though it's hard to divide up tangible assets it doesn't relieve you from your responsibility to make sure that things get divided up four ways equally however you do that perhaps with all of the heirs participation cooperation signing off on everything that's up to you whether that's getting things appraised or letting people kind of pick by lots or just getting the four of you to agree um but but handling it under your own terms kind of like i'm gonna take this or sis you just go get whatever you want out of mom's house and we'll figure out what to do with the rest that that's likely to cause some problems and you want to make sure you address the tangible stuff just like you do the financial stuff and and the and the real estate for that matter so those are 12 executive mistakes i'll also mention that while uh you you may be appointed or named as an executor in a will all of these mistakes also apply to apply to someone who as is an administrator of an estate and an administrator is when somebody died without a will and a judge has to appoint an administrator and same role pretty much uh of an administrator when someone doesn't have a will versus an executor that was named in a will so it's just as easy for administrators to make these 12 mistakes mistakes as as it is for the executor to make these 12 mistakes all right make sure you give me a like and a subscribe it doesn't cost anything and by subscribing and clicking the notification bell you won't miss anything as i keep making these educational estate planning videos we'll see you next time