If you recently lost a loved one and find yourself in charge of administering the decedent’s estate, you will likely find yourself struggling to manage your grief while simultaneously focusing on the practical steps you need to take during the probate process. Unfortunately this internal struggle often leads to making a mistake. Sometimes those mistakes can be costly ones. To help you avoid making those mistakes, a Los Angeles probate attorney at Collins Law Group discusses probate mistakes you want to avoid making.
What Is Probate?
When an individual dies, he or she leaves behind assets. Those assets make up the decedent’s estate. Probate is the term given to the legal process that eventually transfers those estate assets to the intended beneficiaries and/or heirs of the estate. Probate also serves other functions, including:
- Authenticating the decedent’s Last Will and Testament if one was left behind
- Identifying, locating, securing, and valuing estate assets
- Locating legal heirs of the estate if the decedent died intestate, or without a valid Will
- Allowing creditors the opportunity to file claims against the estate
- Litigating any challenges to the Will or estate
- Ensuring the taxes owed by the estate are paid
Probate Mistakes
Acting as Executor for the first time, and grieving the loss of a loved one, provides the perfect setting to make a mistake. Understanding some of the most common mistakes other Executors make should help you avoid making those same mistakes. Toward that end, the following are some common probate mistakes you want to avoid making:
- Not realizing that the estate qualifies for a small estate alternative to formal probate. Most states offer a small estate administration alternative to formal probate for estates that qualify. If the estate qualifies for small estate administration it will save both time and money; however, you must recognize fairly quickly that the estate may be eligible for this option for the estate – and beneficiaries – to benefit from avoiding forma probate.
- Failing to properly categorize estate assets. Not all assets are probate assets. Non-probate assets bypass the probate process altogether and, therefore, may be distributed to beneficiaries immediately after the decedent’s death. Trust assets, certain types of jointly held property, and proceeds of a life insurance policy are just a few examples of non-probate assets. Failing to properly categorize assets can hold up the entire probate process; particularly if the estate might otherwise qualify for small estate administration.
- Transferring assets out of the estate too soon. As the Executor you have the authority to approve creditor claims and pay creditors as well as to distribute assets to intended beneficiaries. Sometimes, however, an estate does not have sufficient assets to pay all claims and honor gifts in a Will. When that is the case, creditors must be prioritized according to law and assets distributed according to that priority. If you fail to follow the law and distribute assets accordingly, you could be held personally liable.
- Failing to properly calculate federal gift and estate taxes. Every estate is potentially subject to federal gift and estate taxes. In addition, some states also impose a state level gift and estate tax. You should make an initial determination at the beginning of the probate process as to whether the estate is likely to owe gift and estate taxes. By doing that, you are in a better position to review claims against the estate down the road in the event that the estate lacks sufficient assets to pay all claims.
- Going it alone. If you have never before served as an Executor it is not wise to try and probate an estate without the assistance of legal, and other, professionals. The probate process often requires at least a basic knowledge of legal and financial concepts that the average person does not have. Hiring an estate planning attorney, an accountant, and other professionals can be the key to avoiding damaging errors.
Contact a Los Angeles Estate Planning Attorney
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to disinherit an heir to your estate, consult with an experienced estate planning attorney near you. Contact the Collins Law Group by calling (310) 677-9787 to register for one of our FREE estate planning workshops.
- Is It Possible to Modify an Irrevocable Living Trust? - January 7, 2020
- Top 3 Wealth Protection Strategies - December 17, 2019
- Early Retirement May Be Costing You a Fortune - December 12, 2019
