Written By: Roger N. Levine, JD, LL.M, CPA
How to Avoid Common Mistakes
When a loved one passes away, after taking time to grieve, there are many responsibilities. Some of the more technical steps involved in probate and Trust Administration may prove overwhelming. However, accomplishing these tasks assures the family will preserve, and benefit from, the wealth which your loved one worked so hard to accumulate.
What are some important responsibilities I should focus on?
Even though there is no longer an estate tax, contrary to what many may believe, there is still plenty to do! A qualified Estate Planning/Estate Administration attorney may help to ease the burden and guide you through the more difficult of these tasks.
The Executor, if there is a Will; or the Trustee if there is a Trust, are named in the document (if neither a Will nor Trust exist, an Administrator needs to be appointed). Let’s just call that person the Personal Representative (PR). Please note that an Executor named in the Will cannot act without being appointed by the County Surrogate as part of the probate process.
Below are just some of the responsibilities to be considered at the outset:
- Make funeral arrangements
- Organize a post-funeral gathering
- Attempt to locate legal documents of the decedent (Will, Trust, etc.)
- Order death certificates
- Notify Social Security (if funeral home does not do this)
- Secure the decedent’s property (home, car, etc.)
- Make arrangements to collect decedent’s mail
- Contact credit card accounts to close
- Make a list of important bills
- Notify health insurance and any other supplemental insurance
- Meet with an Estate/Trust Administration attorney
What Are Common Mistakes?
- Taking the advice of friends over professionals: Friends, relatives, and neighbors, all may have good intentions but in most situations the only advice you should rely on is from a professional with the necessary experience in this area. This is true even if the potential “advisor” has previously navigated this process. There are many situations that may require the guidance and expertise of an attorney rather than well-meaning acquaintances.
- Waiting too long to Probate a Will: Prolonging this process can affect your ability to access and transfer any assets. As noted above, the Executor has no authority to act until formally appointed.
- Getting help too late: The PR may be held personally liable for taxes, interest and/or penalties if tax payment deadlines are not met.
- Not keeping accurate accounting records: Accurate records are required to be maintained in order to take advantage of potential tax savings (not merely estate tax) upon the passing of an individual. The beneficiaries may also request this information in order to verify the financial transactions engaged in by the PR.
- Distributing assets prematurely: Distributing assets before the Administration of the Estate is completed may hold the PR personally liable for any claim against the estate. This would include a personal debt of the decedent or an unexpected tax if an audit occurs. An Estate/Trust Administration attorney will be there to be sure the distribution of assets is not made too early and that proper releases are obtained from the beneficiaries in the event that unanticipated expenses arise after distributions have been made.
- Transferring or disposing of assets: Transferring property prematurely may impact opportunities for potential tax savings from the sales or changes of these assets.
Often, even preliminary contact with a qualified attorney whose focus is on Estate Planning and Administration will provide you with quality estate planning resources and answers. Proper counsel can help you avoid some common mistakes. The loss of a loved one is traumatic, and the legal process that occurs when a loved one passes away can be confusing and overwhelming. Your estate planning attorney should be there to provide you with peace of mind during such a difficult time.
The information in this article is not intended to and does not offer legal advice, legal recommendations or legal representation on any matter. Hiring an attorney is an important decision, which should not be based on advertising. You need to consult an attorney in person for legal advice regarding your individual situation.