Mistakes to Avoid if You are Named Executor of an Estate in OR/WA
When people write a will, they often name a trusted advisor or loved one as executor of their estate. While this may seem like an honor, it’s also a significant responsibility. It’s a job that requires the execution of technical, legal tasks, and failing to adhere to the proper protocol can devalue the estate and leave the executor in legal hot water. Read on to learn about a few common mistakes to avoid as an executor of an estate, and call a dedicated Portland and Vancouver probate attorney for help administering an estate in Oregon or Washington State.
Taking Too Much Time to Find the Will, Start the Process
Much of the time, the executor of the estate is a close relative of the deceased person. If you’re named as the executor of your mother or father’s estate, it can be tempting to take your time to grieve before you start the estate administration process. This can be a costly mistake as bills, taxes, and other debts can crop up, generating unnecessary interest and penalties. You need to be appointed representative of the estate before you can start handling the assets, paying the bills, and distributing the estate. It’s important to get the process started as soon as possible.
The first thing to do is to find the will. This might not be as easy as looking in their desk. If the deceased person did not tell you where the will is located, you’ll need to find it. Contact their accountant, their personal lawyer, or other personal representatives who might be aware of the will and where to find it. The will dictates how assets are meant to be distributed, and it’s your responsibility to file the will with the court and follow the will as best you can.
Not Learning the Process
Probate administration can be complex, requiring a number of steps to be taken in the proper order and within certain deadlines. Do your research, talk to a probate administration lawyer, and make sure you know what you need to do when so as not to create unnecessary hardship for yourself and your family.
Paying Off Bills Without Due Diligence
As soon as you become executor of the estate and start receiving the deceased’s mail, you’ll start to find notices regarding their debts. It’s easy to think the responsible thing to do is to start paying off credit card bills and other invoices as soon as they arrive. Unfortunately, once a person is deceased, the order of priorities for debts completely shifts.
As executor of the estate, it’s up to you to identify all of the debts tied to the estate and pay them off in proper order, based on the law. It’s much better to wait until all debts are known before beginning to pay anything off. Consult with the estate’s attorney to make sure you are aware of everything. You can notify creditors of the death, but you shouldn’t start paying until you know what you are dealing with. If an executor spends all of the estate’s money paying lower-priority creditors such as credit card companies, and a higher-priority creditor such as the IRS suddenly shows up with a massive back tax bill, the executor might find themselves personally liable. Paying the wrong creditors is a breach of fiduciary duty.
Risky Investments With the Estate’s Money
Some executors think that they are doing a service by investing the estate’s money during the settlement process in order to increase the value of the estate by the time of debt payment and distribution. This can be extremely risky. If the investments reduce the value of the estate below its obligations to various parties, including creditors and trusts, then the executor could be liable for breach of fiduciary duty. It’s better to let current investments sit where they are (unless there’s good reason to move the funds) or to leave the money with a responsible money manager in a low-risk setting. The executor is meant to conserve, not increase, the value of the assets until the estate is settled.
Working with a probate administration lawyer can help you ensure that the estate of your loved one is distributed in accordance with their wishes. We’ll help you work through will contests, intestate distribution of assets, and other probate issues, whether you are administering the estate of a family member, friend or client. Contact the knowledgeable and thorough Washington and Oregon probate administration attorney John Lutgens in Vancouver at 360-693-2119.