The process of estate administration is not always smooth sailing for those involved. Acting executors & fiduciaries often face family disagreements and other complications wrought with stress and discord. Those charged with administrating estates in Georgia and other states should avoid certain common mistakes to achieve a positive outcome for all involved.
Investing the assets of an estate while the settlement process remains ongoing is said to be one of the most common mistakes executors tend to make. For instance, one group of three brothers named as executors to their father's estate reportedly lost more than $5 million when they attempted to increase the value of the estate by investing in the stock market. The investment strategy failed, and they were forced to fund the trust their father had set up for his surviving spouse from the balance of the estate they were slated to inherit.
Another mistake sometimes made by executors is paying bills and resolving debts on behalf of the deceased too soon after his or her death. This can result in a breach of fiduciary duty if another primary debt, such as a federal tax liability, surfaces later. If the monies were used to pay credit card bills and other household-related debts, the estate may not have enough to cover these higher-priority debts. In such situations, an executor may become personally liable for the tax debt if no assets remain in an estate to satisfy it.
Complications surrounding real estate are also prone to estate administration difficulties. Many times, beneficiaries disagree over whether to retain a property or sell it. If selling is the chosen path, the executor must determine a list price and other fees, which can lead to legal challenges if all those involved are not in agreement regarding such decisions.
There are serious legal responsibilities associated with the required actions of executors & fiduciaries. In Georgia and other states, experienced probate and estate administration attorneys can offer guidance to those facing complications regarding such situations. The assistance of a seasoned professional is often crucial toward a positive, less-stressed outcome in the administration of an estate.
Source: wsj.com, "The Biggest Mistakes Executors Make", Veronica Dagher, Jan. 31, 2016