Taking on the job of estate administration is not something to do lightly. While it may seem like an honor if someone names you executor or if the court appoints you to oversee probate, the truth is that estate administration is a tedious and complicated assignment that requires organization and some financial skill.
The work of an estate administrator includes closing out the accounts of the deceased, protecting the estate's assets and ensuring those assets get to the right people. Making a mistake during this process can lead to severe consequences.
Documents and deadlines
Because of the risk involved in estate administration, you may feel you are not up to the task. Many people named as representatives of estates feel the same way, and they seek the help of a professional to advise them and to handle some of the more complex duties.
One way in which a professional administrator, for example an experienced attorney, can assist you is by managing the paperwork required to close an estate. For example, a surviving spouse may wish to take advantage of the "portability election" option, which allows the spouse to take a first-to-die exemption along with the usual individual exemption. However, there is a deadline for filing the proper paperwork, and the executor who misses that deadline loses the exemption for the surviving spouse.
Your duty to the estate and its beneficiaries includes protecting the assets so that they remain healthy for the heirs. This may mean managing investments, handling portfolios and guarding any tangible assets, such as real estate or art. Allowing the estate to decrease in value may give rise to claims from heirs that you are negligent in your fiduciary duties.
An important step in the probate process is satisfying the debts of the deceased. For this, you must be careful to know the hierarchy of those who have a claim on the estate. For example, do you know the answers to these questions?
- When is it appropriate to distribute assets to the heirs?
- Which creditors should you pay first?
- How do you know which creditors have a valid claim?
- When do you pay the final income tax for the deceased?
These are just a few of the details you will have to get right to avoid personal liability. For example, if you distribute money to the heirs only to learn that the IRS wants its share of the estate, you may have to come up with the money to cover the tax bill.
To avoid the complications and risks that come with representing an estate, you may wish to contact a North Carolina attorney who can handle the duties of administration with skill and efficiency.