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Probate Problems - Don't Make These Executor Mistakes

9/24/2020

 
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Are you unwittingly making mistakes as an Executor of an Estate? If so, you could be in for a legal battle of your own! To help protect you in your role as Executor, we’re sharing a few of the most common mistakes we’ve seen made by Executors, that you’ll want to avoid.
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  1. Rushing to pay Estate bills. Out of habit, an Executor may be inclined to pay Estate bills and invoices as soon as they receive them, just as he/she might do for their own personal bills. However, as an Executor, your job is not that simple. In fact, paying some bills, like credit cards, before other Estate debts, such as taxes and funeral expenses, may expose you to personal liability for a breach of fiduciary duty. We advise seeking guidance from a probate attorney before paying any Estate bills, to ensure that Estate creditors are paid in the proper order according to your State laws.
  2. Trying to increase Estate funds. It can be tempting to invest Estate assets in an investment opportunity you believe to be a “sure thing”. No matter how convinced you are in the return on the new investment, unless you are willing to personally cover any losses the Estate may suffer, it’s just not worth the risk. Your role as Executor is to CONSERVE the assets; not necessarily grow them. If you elect to invest the Estate funds in a manner inconsistent with the decedent’s existing investment plan and decrease the value of the Estate, you could open yourself up to a lawsuit for breach of fiduciary duty.
  3. Mismanaging Estate real estate. If the Estate you are managing owns real property, you need to determine whether the property requires security or needs any maintenance to preserve its current value. We recommend that you consult the property’s insurance agent to ensure proper coverage remains in effect until the property is sold or distributed. If someone is currently living in the Estate home, you may need to negotiate a rental agreement with them or seek assistance for eviction purposes. Additionally, you likely will need to arrange for an appraisal of the property. If the property is a residence, your job may include arranging for the clearing of any personal property and a cleaning of the home. You also will be charged with determining whether improvements should be made to the home in preparation for a sale. 
  4. Losing track of Estate personal property items. Would you notice if a few of Grandma’s favorite rings disappeared? Once you are appointed by the Court to your position as Executor, making an inventory of all Estate assets should be a priority. Failing to do a timely inventory of assets, specifically personal property, will make it difficult to determine if items go missing. It is not uncommon for family members to “help themselves” to personal items of a deceased family member, without obtaining the required permission from the Executor. It is often recommended that the Executor change the locks on all properties containing personal items as soon as possible to avoid anything going missing. This move will help protect you from being sued by beneficiaries who may claim they did not receive their full distribution because you did not responsibly protect the Estate assets.
  5. Distributing Estate assets too quickly. You must reserve sufficient assets to pay any Estate bills, such as creditor claims, utilities, professionals (i.e. accountants, attorneys, and realtors) and taxes. Executors are often pressured by heirs to distribute some or all of their inherited share as soon as possible, sometimes within weeks of the funeral. We advise taking a very cautious approach to asset distribution as you will be held personally liable if the distribution is mishandled. Your Estate accountant and attorney will be helpful in deciding how much and when to make distributions. Your role does not require you to meet the distribution demands of the beneficiaries. Instead, your job is to oversee the Estate in such a way that the assets are preserved, Court requirements are fulfilled, final Estate bills are paid, and THEN distributions can be made.

    If you have questions about Kansas probates, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters.


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620-225-1674

Davis & McCann,P. A. is a premier Estate Planning law firm in Dodge City, Kansas, assisting Western Kansas clients with Estate Planning, Probate, Trust Administration, Business Formation, Business Succession Planning, Farm and Agricultural Business Succession Planning, Real Estate, Elder Law (Medicaid and Long Term Care Planning).  The information found on this website is for informational purposes only and is not a legal opinion, does not provide legal advice for any purpose, and neither creates nor constitutes of an attorney-client relationship.
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