Tuesday, January 13, 2015

Top 10 Probate Pifalls


1. Lack of Focus on Emotional Impact of Death and
    Relationships Among Surviving Loved Ones.

The most important thing about Probate is the management of the feelings of beneficiaries (and omitted beneficiaries, if applicable) and communication among them for the rest of their lives.  So, even though issues of property and debt are necessarily being addressed in Probate, most people do not want to create rifts in families which limits or terminates communication and creates bitterness and resentment.  Think about that when you are giving instructions for your wishes after you die.

2.  No Will.

 If you do not have a Will, then you are not choosing the Personal Representative (Executor or Administrator) or beneficiaries and a bond and permission from the Court to act will be required.

3.  No Witnesses of Will.

 If your Will does not contain a Self-Proving Affidavit, then witnesses who knew you at the time you signed will need to be found.  The older your Will is, the more likely it is to be invalid without witnesses.

4.  Poor Choice of Personal Representative.

 If you choose a person who does not communicate with or get along with others, or who has an alcohol or drug problem, or is going through bankruptcy or divorce, the negative results to the beneficiaries could deprive them of the benefit you intended.

5.  Personal Representative Not Communicating With Beneficiaries.

 If the Personal Representative doesn't tell the beneficiaries what is going on and what to expect, then in the absence of information, beneficiaries are likely to assume the worst, which is dishonesty or outright theft by the Personal Representative.


6.  Disagreements Among Beneficiaries.

If beneficiaries cannot agree that they have all received what they are entitled to receive, the resulting litigation could consume significant Estate assets.  If some beneficiaries want to do transactions involving one beneficiary buying out others or selling an asset, for example, and others do not, then litigation may result.

7.  Disagreement Between Beneficiaries and Personal Representative.

 If the Personal Representative acts over the objections of beneficiaries, that creates a high risk of litigation.  The Personal Representative should be a reasonable level headed person, such as an accountant, who is honest, detail oriented, and unlikely to offend or upset beneficiaries. Disagreements about whether a beneficiary should be able to make a loan to a third party to buy estate property for example, may result not just in disagreement, but withdrawal by Counsel if the proposed action violates ethical rules.

8.  Inadequate Inventory.

 One of the important duties of the Personal Representative is to create the inventory, which is a list of all assets and values and debts and amounts of the Estate.  If a piece of titled property is omitted from the inventory, it will remain in the deceased person's name until the Probate is reopened and it is transferred or until the property is submitted to Washington's Unclaimed Property Registry.  If a debt of the Estate is not listed and other debts are paid, then the Personal Representative and beneficiaries may be liable unless notice was mailed to all known creditors and a Notice to Creditors was published.

9.  Personal Representative Acting Without Beneficiary Consent.

 If a Personal Representative sells a house, for example, without telling the beneficiaries, and it can be shown that the sale was for below market value, then the Personal Representative could be liable to the beneficiaries for the difference.

10.  Failure to Secure Estate Property.

 Non-titled property such as jewelry, electronics, art, antiques, guns, stamp or coin collections, is easily stolen from Estates, especially if it is stolen by the Personal Representative and never listed on the inventory.  Estate property should be digitally photographed and moved to a secure storage facility, not left if the deceased person's house where it can be stolen.
 

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chris@mulvaneylawoffices.com