If you’re trying to figure out who you should make the executor of your estate, the person who will ensure that your will is handled correctly after you pass away, make sure that you choose wisely. Errors that this person makes can be very costly.
For example, take the story of a wealthy individual who passed on, leaving behind an estate worth $12.5 million. The executor was supposed to divide things up properly, giving money to a number of charities and paying the estate taxes. There were also a handful of relatives involved, who were interested in their portion.
While the executor did most of the job correctly, she did not handle the taxes as she should have. She was late filing them and paying them, and the IRS believed that it was because she willfully neglected to pay. Because of this, IRS charged interest and imposed fines on the estate, sending a bill to the executor.
The total cost of that bill was a stunning $1.2 million dollars.
The executor claimed she had reasonable cause not to file the taxes on time, and a lawsuit was started as she attempted to get the money back. Still, this case shows just how costly it can be if things are not handled correctly. A simple mistake involving deadlines could cost hundreds of thousands of dollars.
With this in mind, use caution when determining who will be your executor in New York. As you decide, it is worth it to look into all of the proper legal steps that must be taken to make sure that everything is taken care of correctly.
Source: Forbes, “The Executor’s $1.2 Million Mistake” Ashlea Ebeling, Mar. 04, 2015