Losing a family member or loved one is difficult enough if you are not also involved in the practical aspects of that loss. If you are also the Executor of the decedent’s estate it can be an emotional rollercoaster for you, particularly if you have never served as an Executor of an estate before now. Although every probate process is unique, there are some common pitfalls that you should try to avoid as the Executor of the estate because those pitfalls could cost both you and the estate a considerable amount of both time and money.
Probate Basics – What Is Probate and Why Is It Necessary?
Probate is the legal process that follows the death of an individual. When someone dies, he/she leaves behind an estate that is made up of all assets owned by the decedent at the time of death or in which the decedent had an ownership interest at the time of death. Probate serves several purposes, including:
• Providing the legal means by which estate assets are identified, located, valued, and eventually passed down to the intended beneficiaries or heirs of the estate.
• Allowing creditors of the estate to file claims against the estate.
• Ensuring the taxes owed by the decedent and/or estate are paid before assets are transferred out of the estate.
Executor Duties and Responsibilities
The Executor of an estate is appointed in a Last Will and Testament. The Executor is in charge of overseeing the probate of the estate which includes ensuring that all estate assets are identified, secured, and managed during the probate of the estate. The Executor also must notify creditors and review claims filed by those creditors. If the Will is challenged, the Executor must defend the Will throughout the ensuing litigation. Finally, the Executor must make sure all taxes are paid before assets are transferred out of the estate to beneficiaries and/or heirs.
Pitfalls of Probate to Avoid
If you have never served as an Executor before you could unwittingly make mistakes along the way that could cost you and/or the estate a significant amount of time and/or money. Some of the most common pitfalls of probate to avoid include:
• Not hiring an attorney right away – unless the estate is small enough to qualify for an alternative to formal probate it is highly recommended that an Executor retain the services of an experienced estate planning attorney. By doing so, you dramatically reduce the likelihood that you will make any of the other common mistakes Executor’s make.
• Not properly securing assets – you are responsible for securing all estate assets as soon after being notified of the decedent’s death as possible. If you fail to do that you could diminish the value of assets or lose them altogether.
• Not obtaining professional appraisals – a date of death value must be obtained for all estate assets. For valuable assets this should be done by a professional appraiser to ensure that you have an accurate value.
• Not following the proper procedures for notifying creditors – creditors of the estate have a right to file claims against the estate within a statutory period of time. If you fail to file the proper procedures for notifying those creditors, however, they could come back later and file a claim after the estate assets have been distributed, creating a very big problem.
• Not understanding the priority of claims – if the estate lacks the assets necessary to pay all valid claims the Executor must pay claims in the order of priority set forth in the law.
• Not defending the estate against a challenge – if a Will contest is filed, the Executor has a duty to defend the Will submitted to probate.
• Not obtaining fair market value for assets – sometimes it is necessary to sell estate assets to satisfy creditor claims or create an equal distribution for beneficiaries. Using a professional to appraise and sell the assets ensures you will receive top dollar for them.
Hiring an experienced Illinois estate planning attorney at the beginning of the probate of the estate is the best insurance you have against making a costly mistake while serving as the Executor of the estate.
If you have additional questions or concerns about the probate process or serving as an Executor, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.