Closing out someone's estate takes time and care. Careless mistakes made by an executor can end up costing that person and the decedent's beneficiaries quite a bit of time and money. What are some of the common executor mistakes seen in New Jersey that can lead to estate litigation?
Mistake number one: not giving creditors notice and time to file claims. When someone dies, their creditors have the right to know. They also have a right to try to collect the debts owed them from that person's estate. They only have so much time in which to file those claims, though. If creditors are not given sufficient notice and they miss their opportunity to collect, they have the right to take the issue to court.
Mistake number two: distributing assets before paying taxes and creditors. In wanting to speed up the probate process, some executors may get ahead of themselves and start asset distribution according to what is noted in the estate planning documents. While it is okay to do this, if one miscalculates how much is owed to the Internal Revenue Service and to creditors, beneficiaries can hold the executor responsible for any resulting losses.
Mistake number three: not closing out the estate officially. An estate is not officially closed just because taxes and creditors are paid and assets have been distributed. It is necessary to either have a judge declare it closed or have beneficiaries sign a family settlement agreement saying they agree with how the estate is handled. Failing to close the estate leaves it open litigation.
Estate litigation is costly and time-consuming. Executors can help themselves avoid estate litigation by making sure they take care while working through the New Jersey probate process. Legal counsel can help them do this. If for some reason, estate litigation does enter the picture, an experienced attorney can assist them through that as well.