Serving as an executor of a family member’s estate in Missouri is not as easy as most people think. It is often a thankless job that exposes an executor to liability. To avoid liability, consider avoiding some of the most common pitfalls.
In a recent article in the Wall Street Journal, Veronica Dagher identified four common pitfalls for persons serving as an executor of a family member’s estate.
The first pitfall is paying the estate’s bills too quickly. To avoid this pitfall, instead of paying the deceased’s bills immediately after they come due, an executor should take his or her time to ensure that creditor’s are paid based on legal priority and that the estate has enough money remaining to cover its tax liability. Before paying any creditors, an executor should consult both a Missouri trust and estate attorney and an accountant.
The second pitfall is playing the stock market during the settlement process. To avoid this pitfall, an executor should avoid purchasing stocks or risky bonds, but instead should keep the assets as they are. In other words, an executor should conserve the assets of the estate instead of trying to grow them.
The third pitfall is mishandling the real estate of the deceased. To avoid this pitfall, an executor should consult real estate experts (agents, brokers, appraisers, etc.) to determine the fair market value of property. The executor should maintain insurance on the real estate. Finally, the executor should sell the real estate as soon as is reasonably practical, unless a different arrangement is agreed upon by all beneficiaries of the estate.
The fourth pitfall identified by Ms. Dagher is losing tangible assets of the estate. To avoid this pitfall, an executor should take a detailed inventory of all personal property of the deceased before distributing anything to a beneficiary. Thereafter, the executor should obtain an appraisal on everything that has unique value (art, memorabilia, etc.). Only afterwards, should an executor begin distributing the deceased’s tangible assets to beneficiaries.
If you are worried that you, as an executor, or the executor of a family member’s estate has made serious mistakes in the handling of an estate, please do not hesitate to call our office at (314) 328-0123. We would be happy to discuss your situation.