Can I save money by settling an estate myself?Feb 27, 2023 10:06AM ● By Karen Telleen-Lawton
A friend and former client of mine called for advice when she was named the executor of her mom’s estate. Her mother, who recently died at age 95, had been living in a nursing home, though she still owned her home plus a small property across the street. My friend and her siblings thought they had organized their mother’s affairs beforehand, but there were issues with the real estate and the potential for probate. My friend wondered whether she needed to hire an attorney.
You don’t always need an attorney to settle an estate, but even the simplest of estates can present unexpected twists and turns. If the estate can be settled without going to probate, it may be a relatively straightforward process.
Probate is a court of legal standing designed to ensure that legitimate creditors are compensated and any remaining personal property is paid out according to the wishes of the decedent. If there are more debts than assets, disputes among the purported heirs, or the possibility of unpaid creditors emerging from the sidelines, probate is the legal process for settling these competing claims in
a timely fashion.
If large debts or disputes seem unlikely, here are some circumstances under which you might consider going it alone:
• Someone in the family (preferably the executor) is confident in their organizational and financial skills
• The rest of the heirs share confidence in that person
• Most or all of the decedent’s funds avoid probate and pass directly to beneficiaries. This happens when the decedent and his/her attorney did some careful estate planning so that most estate assets are held in joint ownership, payable-on-death ownership or a living trust. It also works if the assets pass to heirs through the terms of a contract such as beneficiaries in a retirement account or life insurance proceeds
• You have access to an attorney to help with any snags that arise.
Even though I am a retired financial advisor, I don’t recommend acting as executor without the help of an attorney if the main reason is to save money. This is not a good enough reason on its own.
In the case of my friend, she uncovered a complicating factor. Her mother’s manufactured home was purchased before 1976. In that time period, mobile homes such as hers were classified as vehicles and transferred at death like vehicles rather than real estate. Some different rules and fees applied, depending on the state.
My friend was able to resolve this by consulting friends, researching, contacting the commercial interests involved, and ultimately paying a few hundred dollars in fees. She was comfortable with this level of snag, but she had also lined up a couple of attorneys who could help if complications arose.
If you as the executor decide to hire an attorney, they will represent you rather than all the beneficiaries. You have several options.
• Hire your own personal attorney. They may be able to advise you on whether the estate is simple enough to proceed on your own. If estate planning isn’t their specialty, they’ll likely recommend someone you can work with.
• Hire the attorney who drafted your parent’s estate documents. They’ll be familiar with the contract and understand how your parent wanted it interpreted.
• Hire another estate-planning attorney. You may think a specialist will cost you more money but because they are settling estates all the time, they should be efficient at zeroing in on potential snafus before they become big problems. Since they didn’t write the estate documents, they may provide another, possibly different, interpretation.
Finally, take this article as a suggestion to work through estate planning issues with your parents or spouse while they are living. As uncomfortable as the topic may be, they’ll probably appreciate that you’re being open and honest. They’ll likely also be more clear-headed now than when they are 95.
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