When an individual dies, he or she leaves behind an estate that consists of the assets owned by the decedent at the time of death. An estate may be large, valuable, and complex or small, modest in value, and simple. All estates, however, must go through a legal process known as probate during which the administration of the decedent’s estate occurs. If the decedent left behind a Last Will and Testament the individual appointed as Executor in the Will is responsible for overseeing the administration of the estate. If the decedent died intestate, someone will need to volunteer to act as the Personal Representative throughout the administration of the estate. If you are acting as the Executor or Personal Representative (PR) of an estate, you have an important job to do. Making a mistake during the administration of an estate can cost the beneficiaries and/or heirs considerably, both in terms of time and money. In an effort to avoid costly mistakes, it may help to be aware of 10 of the most common estate administration mistakes.
- Failing to locate and/or submit the decedent’s Last Will and Testament. One of the first practical things that needs to occur after a death is locating the deceased’s Will if one was left behind. Once located, you need to submit it to the appropriate court to start the probate process. In most states, you are actually required by law to submit an original Will within a specific number of days (usually 10 to 30) after being notified of the death of the Testator.
- Failing to secure estate assets. If you know you are the Executor or you plan to volunteer to be the PR of the estate, you need to start securing estate assets immediately. This can entail anything from locking up the decedent’s residence to closing financial accounts. Do not, however, sell any estate assets – just make sure they are secure.
- Failing to retain an estate planning attorney. Administering an estate requires a good deal of financial and legal knowledge, as well as takes up a good deal of your time and attention. Retaining the services of an experienced Illinois estate planning attorney ensures you won’t make costly mistakes and removes some of the day to day burden or probating the estate from you as the Executor/PR.
- Failing to identify all heirs of the estate. If the decedent died intestate, the PR must determine who the legal heirs to the estate are and notify them of the estate administration.
- Not using a small estate alternative if the estate qualifies. Most states, including Illinois, offer alternatives to formal probate for small estates that qualify. If the estate you are administering qualifies to use a small estate alternative, you will save the estate money and save everyone involved time by using that alternative.
- Failing to recognize non-probate assets. All assets are not required to go through the probate process. Non-probate assets can be distributed to the beneficiaries immediately which can be crucial if those assets are intended to help with the care and maintenance of the decedent’s family in light of his/her death.
- Failing to properly notify creditors. One purpose of probate is to allow creditors the opportunity to file claims against the estate. First, however, creditors must be made aware that the probate process is underway. As Executor/PR you can notify known creditors personally; however, unknown creditors must be notified via publication according to the state’s notice by publication procedures.
- Failing to make use of professionals. There are several opportunities during estate administration to make use of professionals, such as appraising estate assets, analyzing the estate’s value, and/or selling estate assets. Making use of professionals can reduce the chance of errors and make the entire process more efficient.
- Failing to properly compute and/or pay gift and estate taxes. All estates are potentially subject to federal gift and estate taxes. Illinois residents are also subject to Illinois state estate taxes. Failing to properly compute and pay either tax can have costly ramifications down the road.
- Failing to prepare the proper documents to legally transfer assets. At the end of the probate process the Executor/PR must prepare any and all legal documents necessary to effectuate the transfer of the remaining estate assets to the intended beneficiaries/heirs of the estate.
For additional information, please join us for one of our upcoming free seminars. If you have questions or concerns regarding estate administration in the State of Illinois, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.