When a person is estate planning in New York, one of the most important aspects of the process is selecting the right person for the job of executor. It is not a simple responsibility and there are numerous traps involved with estate administration. The basics of estate administration include distributing the assets, adhering to the desires laid out in the will, and paying taxes. Executors are prone to certain mistakes that should be factored in from the time the estate plan is crafted. Knowing what to watch out for is key.
Some executors might move forward with a distribution of assets too quickly. The executor must remember that he or she is liable for the estate and what is distributed. If it is done too fast before paying for taxes and liabilities, the executor will be responsible for it. A distribution like this is known as at risk. Another factor to consider is the portability election. With this, a spouse who is left behind can use both his or her tax exemption and the tax exemption of the spouse who was first to die. This must be requested – it is not automatically given. While the estate tax is still in effect, the portability election should be considered.
The estate must be properly advertised. The executor’s appointment and the estate’s existence should be advertised because creditors are within their rights to know in the event of outstanding debts. Securities should be liquidated if there is a market decline. The executor, in his or her role managing the estate, will need to be cognizant of stocks. The financial standing of the portfolio is the executor’s responsibility. Finally, the estate must be concluded according to the law. There are several ways to do this including a family settlement agreement or a court accounting where the distributions are approved by a judge.
Since estate planning and an executor are such integral parts of the effective distribution of assets, having legal assistance is crucial for the testator and for the executor. Contacting a lawyer who is experienced in estate administration can smooth the process for everyone.
Source: forbes.com, “Five Mistakes To Avoid In Estate Administration,” Russ Alan Prince, Nov. 6, 2017