Estate Administration is rarely an easy, straightforward responsibility. Numerous problems and challenges can arise and you as the Estate Administrator are responsible to handle each of them for the benefit of the estate and beneficiaries. The experienced Estate Attorneys at Promise Law have seen many different issues arise with estates in Virginia. Here are some of the common risks and challenges of estate administration.
What is Estate Administration?
“Estate administration is the process by which an individual’s lifetime financial affairs are wound up and their property and assets are distributed after they die.” Each state has its own laws that govern these affairs. In Virginia, this is Title 64.2 Wills, Trusts, and Fiduciaries. There are many responsibilities involved, and two of the most helpful guides are:
- Virginia Bar Association Guide to the Administration of Decedents’ Estates in Virginia
- Probate in Virginia Administration of Estates by the Virginia Court Clerks’ Association
The duties of estate administration include: locating the will and verifying its status; submitting the will to the court; locating and notifying beneficiaries; verifying, locating and establishing the current value of assets; collecting information on and verifying any outstanding taxes or other debts; distributing assets according to the instructions contained in the will; settling any other matters contained in the will; and finally, closing the estate proceedings.
Invariably, many of these duties will create problems for the estate administrator that belie their simplicity. The more common risks and challenges are reviewed below.
What are Some Common Risks and Challenges an Estate Administrator May Face?
- Locating and Verifying the Decedent’s Will – If the location of the will isn’t known or if the family is unaware of a will, this can present real problems. Dying intestate, or without a will, leaves the estate administration up to the court, which can appoint someone among the heirs. It may or may not be whom the family or the decedent would choose. The will can also be outdated, not taking account of new marriages, divorces, children or other family relationships, or excluding recently acquired (or disposed of) assets.
- Locating Beneficiaries – If there is no will or known family, this can be an incredible challenge. But even with a will containing listed beneficiaries, locating them can sometimes require an investigator. The Estate Administrator can also be held responsible if assets are distributed to the wrong people.
- Identifying, Securing and Valuing Assets – This is sometimes more complicated than a few local bank accounts, a home and one or two vehicles. Family can often unearth stock share certificates or dividend vouchers for assets that may not be listed in the will. Assets can even be discovered after the distribution has been made. Also, any foreign or out of state assets must be included in this process and they can be extremely difficult to secure and control. Mishandling assets is a serious risk for Estate Administrators, and every caution must be taken to get this aspect of estate administration right.
- Verifying and Paying Debts – The first beneficiary of an estate is its creditors. They must be paid out of the estate’s assets before anything that remains can be distributed to the named beneficiaries. Some debts may be invalid, outside the statute of limitations or otherwise not owed, and should not be paid. Others, like various taxes (including those the decedent should have filed prior to death), must be made current, which requires a thorough review of the decedent’s and estate’s assets. An Estate Administrator can be held responsible for debts that are missed or paid when they are not owed.
- Distribution of Assets – This involves more than dividing all remaining assets equally among the beneficiaries. The will can contain specific instructions that must be followed. There can be certain special bequests to individuals or entities, assets may need to be placed in a trust if a beneficiary is a minor or otherwise unable to manage their finances, etc. Here again, the Estate Administrator can be held responsible for any errors or mismanagement of estate assets.
How Can a Virginia Estate Attorney Help Me?
Contacting a Virginia Estate Attorney when you have been chosen to be an Estate Administrator is a wise first step. They can help you understand your duties under the law and help you follow them. They can also assist with locating assets and beneficiaries, verifying debts, resolving tax issues, and much more. There are many legal steps to administering an estate, and an experienced estate attorney from Promise Law can help you every step of the way.
If you have been appointed as an estate administrator in Virginia, contact Promise Law in Newport News for a complimentary consultation at 757.866.3730. We also invite you to watch our free Probate & Administration Workshop to learn about common errors made in the process.