There are also plenty of not-so-obvious expenses associated with closing an estate — that is, making sure money and property go to the right heirs and taxes are paid. Whether the deceased was rich or poor, there are hidden costs the inexperienced might never dream of, and yet seem perfectly understandable once you think about it.
To choose someone as an executor of your estate is a big decision. At the same time, it is just as momentous for your executor to accept the appointment and do the work. An executor has lot of big and little tasks to master. In addition, there are oftentimes hidden costs to settling an estate, too.
A recent article in Daily Finance titled “The Hidden Costs of Settling an Estate” provides an overview of many of these hidden costs. When it comes to costs associated with estate administration, many are foreseeable by the executor. For example, these include court fees to open the probate, publication costs to give notice to creditors, as well as legal and accounting fees. On the other hand, hidden costs have to do with everything around the edges.
One common hidden cost concerns disposition of tangible personal property. The executor is duty bound to deliver each item safely to its named beneficiary. What happens when the named beneficiary is in Anchorage, but the fine china or gold bullion and executor are all in Miami? Ensuring safe delivery is neither easy nor cheap, but less so than from Paris, Texas to Paris, France. To make matters worse, getting something from Paris to Paris might take a translated legal document or three, with proper apostilles and the works, simply to appease the court.
Yes, hidden costs can mount up as fast as the questions triggering them. Is property scattered in each of these locations? Are the beneficiaries scattered, as well? Are the beneficiaries all adults? Are the (potentially priceless) items in need of cleaning? Are they in need of appraisal? Does the estate already have an itemization of assets, or will the executor have to do some digging or even walk around the house with a clipboard and pen?
The point is this: when it comes to administering an estate, there are many details to mind and each has a terrible tendency to become the executor’s problem. It is hard to plan for everything, but that does not mean you cannot try. When planning your own estate, do not forget to pay heed to the details.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Daily Finance (February 23, 2014) “The Hidden Costs of Settling an Estate”