You might think that being named in somebody’s will as an administrator is a huge thing – but it also comes with a few dangers.
As an administrator, your role is to manage the estate matters of the departed friend. Typically, the testator chooses an individual that he trusts, which means if you are the main executor, then you have the rights to administer the estate on behalf of the owner.
Your role includes the capability to locate and gather the properties, clear any debts, file tax returns and allocate the properties.
Before you go ahead and decide to act as the main executor, you need to understand that there are some hazards which might affect the way you administer the estate.
Disputes with Other Executors
If the parent had more than one adult kid, they would have made the kids co-executors as well to avoid any disputes. However, this is usually a big mistake.
When you have other people watching your every move, then you might end up causing distress in the whole process.
Most of these co-executors don’t understand what goes on in estate planning, which means they will push you to do something when you know too well it needs time.
Many people lack the financial ability to work as co-executors, and they might want to rely on the estate to make headway.
When it reaches this point, you need to find out the best way to control the co-executors. Ask them if they can permit only a single individual to handle the estate on behalf of the others.
Disputes with Beneficiaries
Just because their parent trusted you to the level of making you a trustee, it doesn’t mean that the beneficiaries agree with that opinion.
Your role as the administrator is to make sure the property is distributed fairly and in accordance to the desires of the departed. Nonetheless, the beneficiaries usually hijack some heirlooms even before you get to allocate them.
This makes life hard for the administrator, because he won’t have the capacity to know what has been picked or not.
The lone solution to such a problem is to try and protect the property the moment the owner of the estate passes away. Tell the beneficiaries that this is the law and it must be followed. Additionally, make sure you communicate the requests of the departed, so that the beneficiaries understand that nothing needs to be taken.
It Drains Your Time
One of the largest hazard us is the time that it takes to handle the responsibilities.
Many executors think that the procedure is all about giving orders to people regarding the way things need to be run, but this isn’t true at all. You will be surprised to find that most of the time will be spent handling matters of estate planning.
As an administrator, you can talk to an experienced estate planning lawyer to help you handle some of the responsibilities. However, you will have to compensate them for the time they spend on the tasks because this is their work.
This will cost you money, which means you have to liquidate part of the estate later on to pay for the expenses. When the estate is modest, the fees won’t mean a lot. However, where the estate is small, it can impact the final disbursement.
Liability in Case You make a Mistake
When you work as an executor, you don’t need to make any mistake, otherwise you will be held liable. When dealing with an estate that runs into millions of dollars, you might end up making an expensive mistake.
For instance, as an executor, you have the role of paying taxes first and other creditors before you disburse the balance to the beneficiaries.
While you are worrying about taxes, the beneficiaries won’t give you peace of mind because they will want their inheritance fast. This can lead to costly mistakes. When this happens, you ought to explain to these heirs about taxes, and let them know that taxes have to be paid before disbursement of the balance.
Using Your Own Money in Managing the Estate
If you are lucky to administer a high-end estate, you will get a handsome commission. This is because the commission is determined by the estate size. If the estate is small, you will have to pay from your own pocket.
When you have the luck of being named an executor of an estate, you need to understand that things might not go as you expect.