Most of us will face the loss of a parent or close relative at some point and have to be involved in winding up their estate. It may be tempting to think that you can save money by doing this alone, but this is usually unwise as there are so many potential pitfalls.
A simple estate may mean a family home and its contents, a bank account, maybe a car, and may seem relatively easy to sort out. However, suppose the estate includes a commercial or tenanted property or a business. In that case, matters could become much more complicated and will require skilled professional help.
Don’t forget the work of settling an estate isn’t just about dividing the spoils equitably. As Mark Twain liked to say – the only two certainties in life are death and taxes. Unfortunately, taxes can remain an issue after death too. Some states have probate laws requiring different tax levels to be paid. There may also be federal tax to pay. You are unlikely to have the legal and tax knowledge to sort this out yourself. If your relative has left a high-value estate, these sums could be considerable, and you are going to need the best probate attorney you can find to untangle this knot for you.
Tax may not be the only payout required. Has the deceased relative left any debts? There may be loans, mortgages, or outstanding health care costs to pay. Don’t forget funeral expenses. The average funeral now costs between $7 000 and $9000. All these will have to be settled before any bequests can be shared. Your probate lawyer will be able to advise you which creditors have to be paid first. Sadly, probate lawyers do not work for free, so don’t forget to factor in that cost too!
You know what they say – where there’s a will, there’s a relative. Disputes over high profile wills may provide many entertaining column inches for the tabloids, but they also cause heartbreak, stress, and break up families. Family circumstances may have changed since the will was drawn up. The deceased may have made a late marriage but neglected to write a new will including the new partner and children. Siblings who have shouldered more of the care for their parents may think that they have a greater claim than siblings who were uncaring towards their parents in their old age. A cool professional head is required to sort all this out!
Hopefully, you have started to think about making a will yourself. Maybe you think that you are too young, or you have just been too busy. If you have a few assets, a life insurance policy, a house, and a couple of kids, you need to make a will, if only to avoid leaving a mess behind you for grieving relatives to sort out. Life’s uncertain. Think ahead and take care of those you love.