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Did a loved one appoint you to serve as the executor of their will before they died? Or, did a judge decide you are the right person to play the part of the probate executor for a family member?
Either way, you should start learning about the ins and outs of South Dakota probate law or the probate law in your specific state. Make sure you’re ready for the obstacles you might face as the executor of a loved one’s will.
Take a look at several common challenges executors face during probate and plan accordingly.
Challenge #1: Locating Assets and Appraising Them
If your loved one died and left a will behind, you might not think locating their estate assets will present any challenges. However, gathering these assets isn’t always as simple as it seems.
You may find some of your loved one’s assets inside their home. But you might also have to look for them in storage units, safe deposit boxes, and other places.
Tracking down these assets and gathering them all in one place is the first big challenge you may face as a probate executor. And even after collecting your loved one’s assets, you’ll find that this is only half the battle.
You’ll also need to have these assets appraised so you know what they’re worth. Set aside more than enough time to tackle this task to avoid feeling too overwhelmed.
Challenge #2: Dealing With Debt Collectors
According to a recent survey, almost half of Americans expect to leave behind at least some debt to their families when they die. This can present problems for their families, since the average person has over $20,000 worth of debt.
As the probate executor for a loved one, you’ll need to figure out how much debt they had. You’ll also need to deal with any debt collectors who might start to come out of the woodwork after hearing about your loved one’s loss.
At first glance, it might appear as though your loved one left behind quite a few assets. But any outstanding debts they had can quickly eat into the value of their estate and potentially leave your family with little to nothing in the end.
You must put out a public notice about your loved one’s death and allow debt collectors to stake their claims. This is one of the least exciting executor responsibilities, but it’s also extremely important since unpaid debts could cause legal troubles down the line.
Challenge #3: Taking Care of Tax Obligations
In addition to paying down any lingering debts your loved one may have owed, you’ll be in charge of filing a final tax return on their behalf. You’ll also need to take care of any tax obligations your loved one had to the Internal Revenue Service.
This is yet another part of the probate process that can diminish your loved one’s assets. Work with a tax accountant if you aren’t sure how to handle it.
Challenge #4: Managing the Expectations of Beneficiaries and Settling Disputes
As the probate executor for a loved one’s will, you’ll automatically become the point person for beneficiaries who might have estate administration questions or concerns. Your job is to manage the expectations that beneficiaries have when it comes to issues like inventorying assets, paying debts, and will execution.
Additionally, beneficiaries may rely on you to settle any disputes that might arise among the decedent’s family members once it’s time to start distributing assets. Even if you have a tight-knit family that doesn’t traditionally prioritize wealth, the probate process can bring out a different side of some people.
Your family will also likely still be mourning the loss of your loved one throughout the entirety of the probate process. This could cause disagreements to break out over who is entitled to certain assets and what they can do with them.
Fortunately, your loved one’s will, intestate succession laws, and a probate judge can all assist you with asset distribution. But you might still be the messenger who has to tell beneficiaries they aren’t going to receive certain assets. This could end up being one of the biggest executor challenges of all.
Challenge #5: Procuring a Probate Bond
Ideally, you should show others involved in the probate process that you mean business right from the start. One way a probate executor can do this is by procuring a probate bond.
This is a surety bond designed to show that a probate executor will act in good faith while executing a loved one’s will. It protects beneficiaries and creditors in the event that an executor chooses to mismanage or misuse any of the assets that a loved one left behind.
Probate bonds are useful financial tools. But many cost between 0.5% and 1% of the value of a person’s estate. A $500,000 probate bond could, therefore, cost up to $5,000, if not more.
Paying for a probate bond might not always work with your budget. The challenge is figuring out how to afford one without having full access to a loved one’s assets yet.
Are You a Probate Executor? See How Rockpoint Probate Funding Can Help
If you’re the probate executor for a loved one’s will and you’re struggling with some of the challenges listed here, Rockpoint Probate Funding can help. We can extend probate cash advances that will enable you to pay for a probate bond and other expenses without having to dip into your own finances.
Contact us at (888) 263-8588 today to discover more about how we can assist you during the probate process.
