Saturday, October 13, 2018

5 Probate Mistakes That Can Cost You Dearly

When it comes to estate-planning, it’s usually a good idea to create documents that allow you to avoid probate. There are a number of really good reasons to avoid probate, from tax savings, time savings, and of course, privacy. However, there are times when probate is unavoidable, and when that happens, whomever is left to administer the estate needs to know how to proceed, so that critical mistakes aren’t made. For most people, using the services of an experienced probate lawyer saves them time, money and heartache.

Here are some of the mistakes we’ve seen people make in the past that have cost the estate, and sometimes the administrator, dearly.

Mistake #1 – Failing to Create a Complete List of Assets

When a person dies, one of the first things that should happen is the creation of an inventory of assets. Well, in an ideal world, this would have been done prior to death and updated regularly. Nevertheless, every asset of the decedent needs to be identified so that (1) they can be disbursed to appropriate beneficiaries, or (2) sold to settle debts. That’s right, before anything can be distributed, all debts must be paid. The easiest way to do this is to create an inventory of assets.

Mistake #2 – Failing to Create a Complete List of Debts

Just like assets, the decedent’s debts must be identified. Again, in a perfect world, all of the decedent’s financial information would be compiled and available to the administrator. When this doesn’t happen, things get difficult. The best way to identify all debts is by:

  • Collecting mail
  • Obtaining a credit report
  • Talking with a spouse or personal financial advisor

Mistake #3 – Failing to Notify Creditors of the Death

When an estate enters probate, all of a decedent’s creditors must be notified so that they can collect what is owed to them from the assets of the estate. This is a legal requirement and the estate cannot be closed out until this happens. If a creditor is not notified and the estate is closed out, the administrator may have to pay the debt from their own pockets.

Mistake #4 – Failing to Protect Assets

Assets must be identified and protected as soon as possible to avoid theft. As an administrator of an estate, family dynamics may prove difficult, as some family members may seek to hide assets they feel they are owed.

Mistake #5 – Failing to Involve Financial, Legal and Tax Professionals

Often, estate administrators may try to cut corners in an effort to save the estate money. They may delegate important tasks to friends or family members who, while they mean well, have no experience in settling estate matters. The best thing that you can do to preserve the estate is to utilize the services of financial, tax and legal professionals.

If you find yourself the administrator of an estate, contact the Law Office of Carey Thompson today to discuss your situation with a Texas probate lawyer.


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