So you’ve been named the personal representative of a loved one’s estate. You may still be reeling from the loss. And now, you’re facing the seemingly Herculean task of organizing their estate and sorting out their affairs.
In New Mexico, the estate administration process may follow multiple paths: probate, summary probate (a simplified process for smaller estates), nonprobate transfers and trust administration, to name a few. Your loved one’s estate plan – or lack thereof – will inform the steps you need to take.
Watch out for these common pitfalls as you start to navigate the process.
1. Failing to take a thorough inventory
One of the first steps in any estate administration is to identify the assets. A thorough estate inventory should include not only real property, but also financial assets and debts. Look for bank accounts, retirement accounts, stock holdings, bonds, annuities and anticipated income. Debts may range from credit card bills and medical bills to utility bills, mortgage payments and the like. You should also inventory your loved one’s vehicles and personal property. Obtain statements, titles, deeds and other important documentation. Another critical step involves determining the approximate value of each asset, which might require a formal appraisal.
Once you have a complete picture of the estate, you will be in a much better position to move forward.
2. Putting off the tax considerations
Taxes are a major component of the estate administration process. Depending on the estate, you may have to file income tax (state and federal) as well as estate and gift taxes. Failure to do so in a timely and accurate manner may result in penalties. In complex estates especially, the sooner you start addressing the tax considerations, the better.
3. Not getting legal help
Estate administration is a tremendous burden to shoulder alone. As a personal representative, you are considered a fiduciary and therefore held to high standards. Missteps could expose you to personal liability. Find a trusted attorney to guide you through the process – you won’t regret it.
