Few people feel fully prepared when they are named a Personal Representative (an Executor, or Executrix) in a loved one’s will. They are often worried about knowing how to probate an estate, what to do, and when to do it. And about making mistakes.
These worries are common, and completely understandable. Legal processes are daunting to most people to begin with, and figuring out how to probate an estate while grieving the loss of a loved one is even more so. On top of that, Personal Representatives can be held personally financially responsible when they make a mistake that results in a loss for the estate, making it sometimes an even more stressful experience.
Time and again we’ve seen people make these easily avoidable mistakes, mistakes that cost them time and money, when probating an estate:
Mistake #1: Procrastinating When Probating an Estate
We know that making decisions and figuring out legal processes while you are adjusting to the loss of a loved one is overwhelming. But the single biggest mistake you can make when probating an estate is waiting. It’s a mistake that can cost the estate money if you miss the discount window of 90 days for the Pennsylvania Inheritance Tax. And it can cost you personally if someone with an interest in the estate complains that your procrastination cost the estate – if their complaint is found valid, you could be required to personally pay money in the form of a surcharge.
Mistake #2: Taking Too Long to Hire an Lawyer to Help with the Probate Process
As a Personal Representative of a will in Pennsylvania, you are not required to hire an attorney to guide you through probating an estate and estate administration. But our experience is that most do. And you should make the decision about whether or not to hire an attorney promptly after your loved one’s death. When you involve an attorney in the earliest stage of estate administration, they are more easily able to help you avoid costly mistakes and wasted time in the probate process.
If you wait until you are overwhelmed or struggling in the later stages of estate administration to hire an attorney, it’s likely they will spend more time and effort correcting mistakes than they would have needed to if they had been involved earlier.
Mistake #3: Hiring the Wrong Lawyer to Probate an Estate
Many, many attorneys will take on Personal Representatives of a will as clients. Maybe even most. Unfortunately, too many do so without the experience they need to help you with estate administration as effectively as a lawyer with more probate experience.
A probate lawyer with decades of experience, who has been called in to take over countless estates that weren’t handled correctly, and who is called on to testify as an expert in estate administration matters is clearly going to be able to help guide you through probating an estate much more effectively than a lawyer who has handled a handful of estates for friends and acquaintances.
We recommend interviewing a few different probate lawyers and asking questions like:
- How many estates have you handled?
- What are the steps we need to take for the probate process?
- How do you charge?
- Do you have experienced legal assistants to do some of the work to keep costs lower?
- Will you prepare any final tax returns for my loved one and the estate?
- About how long will it take you to finish the probate process?
- How much do you think it will cost?
Working well together with a probate lawyer isn’t just dependent on their legal knowledge and experience, though. While you are interviewing them, pay attention to how they communicate with you. Are they listening to your concerns? Are they explaining the process in a way that’s easy for you to understand? Are they respectful of the level of involvement you want to have in the estate administration?
Choosing the right probate lawyer to work with, and choosing them promptly after your loved one passes away, is critical if you want to avoid wasting time and money.
Mistake #4: Failing to Understand Fiduciary Responsibilities During Probate
In simple terms, a fiduciary is a person obligated to act in good faith and trust for the benefit of the estate. They are ethically bound to act in the estate’s best interests. As a fiduciary, you are held to a very high standard as you go about your duties of estate administration. If you mishandle an asset and it costs the estate money, or you miss a discount deadline, or you distribute assets to beneficiaries improperly, you can be held financially responsible.
A Personal Representative who fails to act in the estate’s best interests when they are probating an estate can be required to personally pay a surcharge to, or on behalf of, the person hurt by the breach of your fiduciary responsibilities.
Mistake #5: Paying Claims Against an Estate Improperly
Part of your fiduciary responsibility to the estate is administering the estate according to the law, and a common mistake we see is a failure to understand something called “statutory priorities”. Pennsylvania law establishes a schedule of priorities for paying claims against an estate – it very specifically outlines who gets paid in what order. One of the most common mistakes we see is paying people “out of turn” during the probate process.
For example, a Personal Representative will pay Cousin Millie the $1,000 left to her in the will before the funeral bill. Or they pay Cousin Millie before a creditor. Or before someone else in the estate claimed commission. Or before any of the other claims that take priority over Cousin Millie, according to Pennsylvania’s statutory priorities. And as a fiduciary obligation, making this kind of mistake could make you personally responsible for paying a surcharge to the person or creditor with the claim that should have been paid first.
Mistake #6: Not Identifying and Securing Assets Quickly During the Probate Process
One of your responsibilities as the Personal Representative of a will is to quickly identify and secure all assets. If you do not identify, and secure, assets fast enough, it can result in a financial loss to an estate. Again, when those financial losses happened because you failed to fulfill your fiduciary responsibility to the estate, you may be held personally financially responsible.
Do you know what should be considered an asset in an estate? Do you know how to secure all an estate’s assets in a way that satisfies your fiduciary obligation? Are you aware that even if the will specifically “gives” an item to someone, you still need to secure that item as an asset that remains part of the estate and is distributed according to statutory priorities?
If you can’t answer these questions, it’s probably wise to consider an experienced probate lawyer to reduce your personal financial risk.
Mistake #7: Mismanaging Real Estate when Probating an Estate
For many Personal Representatives, the single biggest asset you’ll deal with in the estate is any real estate owned by your loved one. And all too often we see people assume that because a piece of real estate can’t be picked up and carried off by someone, they don’t have to do much to “secure” this asset. This is a costly misunderstanding of what it means to “secure” an asset like real estate. Access to the property needs to be strictly controlled, and it needs to be properly insured while it remains property of the estate. It also needs to be maintained in the condition in which it existed when the owner passed away. You need to do everything to and for the property that your loved one did before they passed away. And sometimes you might need to do more than they did.
In addition to securing any real estate, you have a fiduciary responsibility to make sure that the estate gets “fair market value” for the real estate. And the “fair market value” of any real estate in the estate will need to be determined even if the real estate is being given to a named beneficiary in the will. Again, as a fiduciary, you can be held personally financially responsible if any real estate isn’t appraised properly and the estate suffers a financial loss.
We know that facing the probate process and making sure you fulfill all of your duties and obligations during estate administration without incurring personal liability can be confusing, scary, and overwhelming. If you’re struggling to figure out what you need to do, we’re happy to offer a brief phone consult at no cost to you.