Probate proceedings require diligence and careful oversight. That is one reason why people often take great care to choose someone they trust to act as their personal representative. It is also one reason why estates with valuable property or no testamentary instruments have to pass through probate court to ensure compliance with the instructions provided by the decedent and all applicable state statutes.
Personal representatives have many responsibilities throughout the probate process, and they typically need to be fastidious about ensuring they fulfill all of them. The three common mistakes below might lead to removal from the position or personal financial liability for a representative.
Failing to communicate with creditors
The law requires that the representative of the estate provide notice to creditors and other interested parties. It is typically necessary for a personal representative to publish notice and to send written communication directly to certain outside parties. Failing to notify creditors, heirs, beneficiaries and other interested parties about probate proceedings might lead to financial liability or efforts to remove the representative from their role.
Distributing assets prematurely
Some estates have enough resources to easily meet all of the financial obligations of the decedent. In such cases, personal representatives can sometimes make ongoing distributions throughout the administration process.
However, best practices often include waiting until after communicating with all creditors and fulfilling all tax responsibilities to distribute assets. Premature property distributions can result in claims against the estate that the representative cannot pay. They could then be at risk of personal financial liability for debts and taxes that they cannot cover with estate resources.
Failing to document distribution
Personal representatives aren’t just liable for debts and taxes that they fail to pay. They can also be responsible for the loss of estate resources or the reduction in estate value that might follow improper management of estate assets.
They need to secure assets and take proper care of them. They also need proof that they distributed them in accordance with the law or the instructions of the decedent in case there are disputes later. Even in cases involving personal property, documenting all distributions to beneficiaries and any sale of estate assets can be crucial for the protection of a personal representative.
Learning from common estate administration mistakes can help those overseeing the probate process. Personal representatives who are proactive and fastidious can typically avoid incurring personal liability and/or facing litigation to remove them from their position.