When someone dies, administering
the person's estate can be a frustrating and an aggravating process. Everyone seems to want or need something—beneficiaries—government—courts—creditors—etc. The pressure causes people to make
mistakes. In my practice, I have noticed
four common mistakes that increase heartache, administrative time, and cause unnecessary
litigation. The mistakes are as follows:
1.
Keeping Secrets. Sometimes personal representatives resent
providing information to beneficiaries. Instead, the personal representatives want
to keep estate business secret and frequently refuse to provide information. This is a mistake. Testamentary documents, the status of the
administration, as well as the expenses of the administration are not secrets. To the extent reasonable, information
regarding the estate should be made available to the beneficiaries in a timely
manner. Providing the information assures
the beneficiaries that the assets are properly managed. Moreover, secrets create suspicion while
disclosure creates trust.
2. Comingling
Funds. Too often personal representatives put the
deceased’s money in the same account as their own accounts. Moreover, personal representatives sometimes
pay personal expenses from the estate. This
is a breach of fiduciary duty and creates problems for administration. Commingling creates an accounting nightmare
as the money must be tracked. It gives
the appearance that the personal representative has stolen the money. Lastly, even if the personal representative had
no mal-intent, the appearance of impropriety may invite a lawsuit from the
beneficiaries.
3. Avoiding
the Estate Business. Avoidance
of the estate business is common place and creates problems down the road. Prompt attention to financial and legal
issues of the estate is imperative as deadlines to perform the work frequently
loom. Failing to adhere to the deadlines
often increases the cost and complexity of the administration.
4. Following the Deceased’s Oral Instructions. A personal representative cannot guess at
what the deceased wanted to happen with the property. I often hear clients say
that "Mom told me before she died that she wanted me to have the
house." While I understand that mom
may have said that, it has absolutely no bearing on who receives the property
at death. If the testator wants to
control assets after death, he/she must make a valid written testamentary
document. Without such, the state
intestacy statutes will determine who receives the property. Absent agreement from all the
heirs/beneficiaries, a personal representative cannot use oral instructions
from a parent to decide who receives the estate property.
If
you recognize any of the actions above in yourself or others, you should
contact an attorney to discuss the matter.
Probate of an estate is hard work, but does not need to cause
heartache.
No comments:
Post a Comment