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Don’t Take Unsanctioned Shortcuts for an Estate or Trust

Treat your job as an executor, administrator, or trustee with care and act reasonably and responsibly. Realize that this job is a major, and often time-consuming, commitment to fulfill the wishes of the testator or grantor. Avoid taking unsanctioned shortcuts through the administration process. To avoid lawsuits or trouble with the IRS, the probate court, and beneficiaries, seek expert advice, document proof for all decisions and appraisals, and balance accounts accurately.

People rarely understand the magnitude of the task in front of them when someone asks them to act as executor or trustee. Even if they did, the date when the job ceases to be theoretical and the action really begins is often so far in the future that they can’t even imagine such a time.

If you’ve accepted an appointment as an executor, administrator, or trustee, you’ve agreed to act reasonably and responsibly. This job isn’t a small favor you can discharge in an hour or two, or even in a day or two. It’s a major commitment on your part to carry out the stated wishes of the testator or grantor. Treat this commitment with all the care that you would lavish on a beloved relative or friend.

As you wend your way through the seemingly endless administration of an estate or trust, you may be tempted to look for ways to reduce your workload. After all, most people take shortcuts on their personal finances, and everything usually works out fine.

Resist the temptation to find an easier route through the administration process.

No one will ever disagree that many of the administration steps you’re supposed to take seem pointless, but you must take them nonetheless. If you’re supposed to publish a notice in a certain paper, do so. If you should have a piece of property appraised, don’t assign it a value, and move on. Instead, hire an appropriate appraiser, pay the fee, and get the appraisal in writing.

Taking shortcuts through an estate or trust may save you some time upfront, but the cleanup costs on the other end, when the IRS wants to see the proof that you’ve valued something correctly or your accounts don’t balance, can be huge.

Whether you’re administering an estate or trust under the eagle-eye supervision of the probate court or you’re merely answerable to the beneficiaries, you’re responsible. Failure to follow through on those responsibilities may open you up to removal as fiduciary as well as potential lawsuits from any person having an interest.

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