Common Mistakes Executors Make with Probate Real Estate
Lack of proper guidance to help through the process and not knowing how probate works..
The stress of dealing with a loved one passing and the complexity of probate could be overwhelming for most people. You may be struggling with some of the following questions; Do I need to file for probate? Where do I start? What am I supposed to do first? Do I need an attorney? Do I need to sell the estate of the deceased?
Everyone's situation is unique to them. Begin by looking for a will or living trust. An attorney whose primary practice is probate, not criminal or personal injury will get it done most efficiently. I've heard lots of stories from personal representatives about attorneys who do not have experience in probate cases. They took on this task, and the case ended up tied up for months or years. You will need an attorney who specializes in probate. This will save time and leave more money for the estate
Having been in this probate niche for some time allows us the privilege to know some great attorneys right here in California who know the ins and outs of the process. I also have a network of probate professionals throughout the country. You may want to contact a probate real estate specialist like myself to help where the attorney leaves off.
Selecting the wrong service providers to help with the estate.
You want to surround yourself with vetted service professionals who get things done right. This can include real estate agents knowledgeable in probate, certified professional accountants, estate liquidators, building contractors, inspectors and appraisers dealing with real estate, personal property, like art, furniture, jewelry. Social workers knowledgeable in family transitioning. Deciding how to support elderly family members or dependents, and what to do with the accumulated stuff is almost always a challenge. Collections that may have meant everything to one person may not mean much to the rest of the family or heirs. Some people just really don't even want to deal with it at all; it could be that it's very emotional or they just don't care. So having the right estate sale professionals to appraise the value of what's left behind is really important. It could be the difference of thousands or even tens of thousands of dollars. We all have heard stories of someone who bought an antique at a yard sale for a few dollars that ended up being worth thousands. It would be best to take inventory first, then, figure out what kind of specialist that you need.
2. Thinking the probate process will not take too long
Historically, the time from petition to appointing the executor, receiving the letters testamentary took about eight weeks, it's taking three to four months, and it could take another three to twelve months after to get the final distribution and that's if everything goes right. If the family and the heirs don't agree on the assets, that's how it should be handled. It'll definitely slow things down more.
3. Executor relying on the attorney to handle everything.
By talking with a lot of personal representatives, they expect the attorney to do a lot more so they wait and take very little action in managing the affairs of the estate. Failing to understand that the attorney is going to manage all of the legal and court aspects. What to do, and in what order, then hand it off to you. Meanwhile you should be arranging and meeting contractors, clean out crews, property management, estate sale companies, senior assistants, CPAs.
4. Failing to secure the estate's personal and real property.
As a personal representative of the estate, you have a fiduciary responsibility to protect all of the assets and to make sure that they're kept secure and in good condition. Unfortunately, someone who may have been a friend of the deceased or even a relative can come in and ransack the house, steal valuable assets such as collections, art, and jewelry. A quick fix for this is to take pictures of all the contents in the house with your phone, and change locks right away. This provides a date stamp for your records. For added protection you might consider adding a security video camera.
5. Failing to provide adequate property insurance for the estate.
A house may have insurance especially if there's a mortgage. However when a property is vacant for a period of time, the current insurance may not cover it and it's important to get a vacant house policy to cover hazards like fire, water, and other damage from other disasters. Anything can happen.
6. Attempting to sell the estate's real property without understanding the market.
For over 80 percent of families, most of the wealth is in real estate. Naturally, a highly trained and experienced probate real estate professional will either save or cost the estate a lot of time, money and aggravation.You want to have a real estate agent who can give you a fair market value of what the property will sell for in that neighborhood to get top dollar. Probate brings some added challenges because of the court involvement in the sale.
Stories abound from attorneys and other executors who experienced how terrible the real estate agent performed because they were chosen just because they were a family friend. Later causing everyone problems and ultimately money. I've guided estates in managing the mortgage to avoid foreclosure HOA issues, maintenance of the property, through this long process.
First, prices and market conditions are always shifting. Second, investors looking to pull a deal are super aggressive in the probate arena. Although the value of the property at the time of the owner's death must be taken into consideration, it doesn't mean that the property couldn't be sold for a lot more. It's important to review options such as selling an as-is condition or cleaning up and making a few improvements to get top dollar. An experienced probate real estate professional with specialized training can make these options clear for what's in the best interest of the estate.