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5 Probate Emergencies

Posted on: May 17th, 2017
worriedEstate administration is often a lengthy process dictated by a specific timeline of tasks that must be accomplished following the decedent’s death. While some may be tempted to regard estate administration as a checklist, with the last checkbox marking the end of the administrative process, the unique and often unanticipated circumstances that might manifest during probate require careful consideration to ensure that all requirements have been met prior to closing the estate.
  1. Large estate. Estates with significant values not only prompt tax considerations, but also require attentive preparation of inventories and accountings. For instance, an estate could involve a large quantity of income-producing assets, in which case the executor will need to document each and every asset and prepare accountings, an estate income tax return, and additional tax filings. A sizeable estate may present more work than a single executor can handle without a support team. 
  2. Unusual assets. Peculiar items and property in estates—from odd collectibles to rare art pieces—pose tax and valuation issues unique from those that apply to traditional assets. For instance, the executor must calculate date-of-death values for the decedent’s assets. A cost basis report may need to be calculated and filed with the Internal Revenue Service (IRS). (This report is required of all taxable estates, regardless if unusual assets are involved.) 
  3. Surviving incapacitated adult or minor. If the decedent was a caregiver for an incapacitated adult or minor age child, emergency guardianship procedures may be necessary. In estates that involve a will, the decedent may have included instructions and nominated a guardian for the dependent(s). However, the guardian is not required to accept the role, or may have predeceased the decedent. In these circumstances, and if no will is present, children’s interests and the interests of a special needs dependent may be managed by courts.
  4. Foreign assets. Tax requirements for foreign interests and assets have changed in recent years. This is true for assets held in and out of foreign trusts. Considering regulation changes, executors inexperienced in foreign tax reporting are at a higher risk of producing reporting and filing errors.
  5. Negligent executor. Careless actions by an executor, or an executor who is not active at all, could lead to probate complications. The executor may face a removal process, or they may elect to step down. Learn about the executor resignation process in North Carolina.

In best case scenarios, the decedent maintained an up-to-date estate plan that addressed tax and transfer concerns for a large estate, non-traditional assets, or foreign assets. Ideally, the decedent had a Special Needs Trust or included guardianship provisions in their will if they had a special needs or minor age loved one. Sometimes proper planning did not occur, and “crisis mode” may ensue in probate. This is often when legal counsel for estate administration is paramount. Maintaining frequent communication with an attorney throughout the probate process can help to identify and prevent emergencies.
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