The do it yourself type might be inclined to settle the estate of a loved one without the assistance of an attorney.   However, probate – the court monitored process of distributing the assets of a deceased – can become a headache for the inexperienced.   There are those who think that probating is just a bunch of paperwork that can be acquired on-line.  As an attorney who has probated hundreds of estates, take my word that the complex and frustrating issues that arise in estates go way beyond filing paperwork.

The personal representative of an estate (executor or administrator) is a fiduciary, a legally appointed representative who is responsible for managing the estate assets for ultimate distribution to the beneficiaries.  If the personal representative behaves in a negligent manner, he or she may be held liable for any damages caused to the  inheritance of the beneficiaries.     Here’s an insight into some of the issues a personal representative may face in the estate administration.

1. Failure to follow the rules

Probate involves following the proper procedures associated with management of the estate.  Among those procedures are the legally required notices to beneficiaries, creditors and, in some cases, the Department of Public Welfare and the Pennsylvania Attorney General.  Fail to follow one of the many rules and the personal representative can cost the estate time and money.

2. Errors on the inheritance tax return

Pennsylvania has an inheritance tax.  Even in estates where the tax percentage is zero, the tax return must still be filed.  Make an error on the return, such as missing a deduction, the early tax payment period, or overstate the tax due, and you’ll cost the estate money.  

3. Mismanagement of the assets

One of the personal representative’s responsibilities is to secure and protect the estate assets.  A personal representative risks charges of negligence if stock is not sold in a timely manner before it drops in value.  In addition, failure to acquire fair market value when personal effects or real estate are sold could bring similar charges. 

4. Failure to account

At the end of the administration of the estate, the personal representative must account to the beneficiaries, setting forth the value of the assets at the start of the administration, any gains or losses during administration, debts of the decedent and estate and costs of administration, among others.  If the personal representative cannot produce accurate records of administration, he or she could face a claim for damages.

While many insist that their siblings all get along and there is no need to hire a lawyer, the reality is that the dynamics change between the siblings once the parents die.  The money associated with an inheritance can further inflame fractured relationships between the siblings and make serving as a personal representative a thankless task.   Using a lawyer to represent the personal representative reduces the risk of administrative error and helps maintain civility amongst the beneficiaries.

Given the potential pitfalls in an estate administration, it is generally not worth the savings on legal fees when one attempts to do it on their own.  Hiring a good estate administration attorney helps to ensure all the proper steps are taken in a timely manner.

If you wish to learn more about estate administration, please do not hesitate to contact Marshall, Parker & Weber for more information.