Wednesday, February 26, 2014
Most people have no idea that serving as an executor or administrator of an estate is very time-consuming and burdensome. There are some “obvious costs” like attorney’s fees, court filing fees, and commissions for the executor, but there are also some not-so-obvious expenses associated with closing an estate. Here are a few hidden costs:
- Time. Closing an estate takes time. The compensation for being an executor may not be worth the time it takes to get papers signed, do an accounting, and tie up loose ends.
- Will contests. If all the beneficiaries sign off on the accounting, the process can be fairly simple. But if a beneficiary wannabe objects, then thousands of dollars may be spent and many months may drag on fighting the will contest.
- Minors. If a beneficiary is a minor or considered incompetent, closing the estate can get more complicated.
- Overseas beneficiaries. If a beneficiary lives in another country, extra money may need to be spent on translations or notarizing documents.
- Property in other states. The executor may have to open another probate if the deceased has a residence in another state.
- Shipping. The estate may have to ship items to relatives far away.
- Sales costs. Commissions need to be paid if assets are being sold at an auction.
- Cleaning costs. If the house needs to be sold, it will likely need to be cleaned first.
- Housing costs. Carrying costs, such as mortgage, taxes, utilities, and insurance can be a pain. Locks may also need to be changed or a security system installed.
See Geoff Williams, The Hidden Costs of Closing an Estate, US News, Feb. 20, 2014.