I thought the pandemic would cause more people to establish an estate plan, but it’s been inflation that has caused this uptick in clients wanting to do their estate plans. A recent poll indicates that 26% of Americans say recent inflation has made them understand the importance of establishing an estate plan.
As the executor or personal representative of a deceased person’s estate, you are legally responsible for setting a deceased person’s estate.
Mistake #1: Paying the Deceased Person’s Outstanding Bills Too Quickly
It’s common for personal representatives to start paying the deceased person’s debts and bills as soon as they start receiving them. However, it’s important first to get clear on what payments should be prioritized over others; we can advise you on the priority of payments to creditors. Funeral costs, along with state and federal taxes, are more important than other debts like household bills. So, don’t allow yourself to be pressured by family members to distribute assets before you’re ready; doing so may leave you without enough funds to reimburse creditors. In this case, the responsibility for debt payment can fall on you personally, so you want to be careful to avoid this.
Mistake #2: Not Protecting the Assets of the Estate
The executor or personal representative (PR) must distribute the assets as per the decedent’s will – that also means protecting the assets from family members who may try to help themselves while the estate is being settled. So, it’s important to ensure everything in the estate is always present and accounted for. Similarly, investing in a home security system and homeowners insurance may also be necessary to ensure further the safety of items that belong to the estate.
Mistake #3: Incorrect Management of Real Estate
Administering real estate is a huge responsibility. Home improvements should only be made if the executor can spend estate assets in this way. On the other hand, if the home is left empty for a long time, staying on top of maintenance is also important. If left too long before being discovered, something like a leaking faucet can end up causing expensive damage and delay a sale. It’s also important to remember that insurance policies only cover empty properties for a certain period.
Done correctly and without upset heirs and creditors, the probate process can be completed within a few months. The key is knowing your responsibilities as the PR of the Estate. We can guide you through the process.