Probate administration can be complicated, and unfortunately, it’s easy to make a mistake. While no one is perfect, the consequences of making a mistake in probate can impact multiple beneficiaries and drain estate resources.
Knowing some of the more common missteps can help you anticipate – and hopefully avoid – making preventable errors.
Legal and procedural errors
When dealing with probate, people often struggle with issues like not having the original will, misfiling paperwork and failing to notify creditors. If you pay out assets before taking care of debts and taxes, you could be personally responsible. Another common mistake is not thoroughly searching for all assets, such as forgotten bank accounts or old insurance policies.
To avoid these issues, it’s essential to:
- Locate and validate the original will
- Meet all filing deadlines
- Settle debts before distributing assets
- Thoroughly search for all assets, including hidden accounts and insurance policies
Following these steps reduces the risk of errors that could complicate the probate process.
Tax mistakes that can drain estates
Taxes are another area where people make costly mistakes. Missing deadlines for tax returns or final personal returns can incur penalties. It’s also easy to overlook tax elections that might save money. If there are out-of-state properties or beneficiaries, failing to comply with those state laws can also be a costly oversight.
Further, while Texas doesn’t have a state estate tax, failing to consider potential liabilities at the federal level is a common oversight.
Working with tax and legal professionals can prevent unnecessary financial burdens during probate.
Executor/administrator errors
As an executor in the Woodlands, it’s essential to understand your responsibilities. One key thing to avoid is self-dealing, which is when an executor benefits unfairly from their role. This is against Texas law and can lead to removal and fines.
Another potential issue is poor record-keeping. Executors must keep track of every expense and income. Without proper records, beneficiaries might question actions, leading to expensive lawsuits.
Communication breakdowns frequently spark family disputes. Regular updates to beneficiaries about the probate process, timelines and potential delays can help prevent misunderstandings that might end up in court.
Being aware of these common probate pitfalls can help Woodlands residents avoid costly mistakes when settling a loved one’s estate. If you’re unsure about your legal, financial or personal duties as an executor, working with an experienced attorney is a good idea.