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What common mistakes do executors make when distributing assets?

On Behalf of | Jun 21, 2019 | Estate Administration

Being named the executor of someone’s estate is not a job that should be taken lightly. The executor has the legal responsibility of arranging for the payment of all income and estate taxes, wrap up the affairs of the estate and distribute the assets of the estate. While the executor is most often trying to complete these tasks to the best of their abilities, it is possible that some steps they take open the estate up to increased tax liability or other consequences. Pennsylvania residents may want to be aware of the potential mistakes they could make and consider consulting an experienced attorney for guidance on how to avoid them.

Many people may not realize they are personally liable for the distributions of the estate. This means if distributions are made before taxes are paid, then the executor would be personally liable for the remainder. These distributions put the executor at risk, even though there is nothing to prevent them from doing so.

Failing to elect portability and failing to advertise the estate properly are also common mistakes executors make. Firstly, a spouse can use both the federal estate tax exemption and the exemption to a first-to-die spouse through portability, but many forget the crucial element to it-it has to be asked for. This is the case even if there is no estate tax liability when the first-to-die spouse dies; it has to be asked for using a separate form. Similarly, the executor’s appointment and estate’s existence must be advertised so creditors can be notified.

Being appointed the executor of an estate is a great honor, but estate administration is no easy task. A number of formalities must be completed properly to ensure that the estate is distributed and concluded, and many find experienced attorneys helpful during this process.