Losing a loved one is difficult enough without the added stress of having to make important financial decisions while grieving. For many people, the duties and responsibilities of probating a loved one’s estate can feel overwhelming. The probate process is time-consuming, complicated, and, quite often, extremely frustrating. If you have been named as an executor or personal representative and are tasked with settling an estate through probate, you’ll want to avoid these common mistakes.
Handling assets incorrectly
One of the first things an executor or personal representative must do is secure all of the decedent’s assets. Accomplishing this requires taking different steps for different types of assets. For example, financial accounts may simply need to be closed, whereas real property (such as a house) might require making sure the property is secure and arranging for its maintenance.
Categorizing assets incorrectly
Some assets do not have to go through probate. When you inventory assets, it is important to make sure you categorize them properly. Assets that are not typically subject to probate include:
- Assets held in trusts
- Funds held in certain “beneficiary designated” accounts (that is, accounts where beneficiaries have already been designated)
- Certain forms of property held jointly
Failing to determine “Date of Death” values
Date of Death values refer to the fair market value of each estate asset at the time of the decedent’s passing. The sooner this task is undertaken, the easier it will be to determine the correct value. Executors often turn to professional appraisers for assistance with this task.
Next time, we’ll look at other common, and costly, probate mistakes.