Estate administration requires months of commitment. Executives or personal representatives have to manage, sell or distribute estate resources. They carry out the testator’s last wishes as outlined in an estate plan. Other times, they must defer to intestate succession rules when an individual dies without a will. Estate administration is often a thankless job, as the compensation provided from the estate is minimal, given the amount of work involved. Additionally, personal representatives face a few significant risks.
What issues can cause negative consequences for those administering an estate?
1. Tax and probate obligations
Personal representatives often have to use estate assets to cover income taxes and possibly also estate taxes. The estate must also prioritize covering court costs generated by probate proceedings or probate litigation.
2. Debt-related responsibilities
Communicating with creditors is a key component of estate administration. Personal representatives have to offer an opportunity for creditors to make a claim for repayment.
They then need to use estate resources to pay valid claims in the appropriate order of priority. Even if the personal representative is not a cosigner for the decedent’s debts, they may have a degree of responsibility if they do not communicate with and repay creditors.
3. Family conflicts and removal attempts
People disappointed with the value of an estate or the last wishes of the decedent may take their frustration out on the personal representative. Estate administration can strain an individual’s relationships with beneficiaries and members of the decedent’s family. They may also face reputation-damaging controversy if beneficiaries or heirs attempt to remove them from their position by pursuing estate litigation.
Having guidance and support throughout the probate process can reduce the likelihood of a personal representative facing direct personal liability or making mistakes that lead to legal controversy. Support and insight into the law can make a major difference throughout estate administration.