As an administrator or executor of an estate, you have many responsibilities to fulfill. You can make these responsibilities far less stressful and more straightforward by keeping thorough records of the estate’s finances and your actions during probate.
Legal and Financial Responsibilities in Probate
An executor or administrator of an estate has various legal and financial responsibilities during probate. Estate administrators owe fiduciary duties to the estate and its creditors and beneficiaries. These duties include acting in good faith, dealing fairly among creditors and beneficiaries, and avoiding self-dealing or conflicts of interest. Record-keeping during probate administration allows administrators and executors to maintain transparency while potentially preventing costly legal disputes.
Key Records to Maintain During Probate
An administrator or executor of an estate will need to keep various types of records to document their activities during probate administration, such as:
- Inventory of estate assets: One of an administrator’s/executor’s primary roles during probate includes gathering and inventorying the decedent’s assets to confirm the extent of the estate. An estate inventory should list the decedent’s assets, their values, and their location (if applicable).
- Debts and liabilities: Administrators/executors should also document the debts and liabilities the decedent owes at their death, which the estate bears the responsibility to pay before distributing assets to heirs and beneficiaries. Record-keeping should also include tracking estate administration expenses.
- Deeds and titles: The administrator/executor should gather and preserve copies of any deeds or titles to assets in the estate, such as real estate or vehicles.
- Correspondence: Administrators should keep copies of all correspondence sent or received on behalf of the estate.
- Court filings: Records kept on behalf of the estate must also include copies of all court filings in the probate case, including the probate petition, court orders, and pleadings/motions filed by parties who intervene in the case.
- Accounting records: An administrator or executor should also keep a detailed financial accounting of transactions, including receipt of income from estate assets and payment of debts or estate administration expenses.
- Records/receipts of disbursements to beneficiaries: When administrators/executors distribute assets to heirs/beneficiaries, they should create and keep a receipt of the disbursement to have a record in case disputes over inheritances arise.
- Tax returns: Administrators/executors should also keep copies of all tax returns they prepare and file on behalf of the estate, including the decedent’s final income tax return.
How Proper Record-Keeping Helps Avoid Disputes
Thorough record-keeping by estate administrators or executors can help reduce the risk of costly, time-consuming legal disputes during the administration. Some of the ways that proper record-keeping can help avoid disputes during probate include:
- Preventing misunderstandings by beneficiaries: Detailed records allow administrators and executors to explain the actions taken during probate administration to beneficiaries, potentially preventing or resolving misunderstandings that could lead to legal challenges.
- Providing evidence during legal challenges: When a creditor or beneficiary launches a legal challenge against an administrator or executor, having complete records gives an administrator/executor robust evidence to defend their actions.
Contact an Estate Administration Attorney Today
If you’ve recently become the administrator or executor of a loved one’s estate, you could be feeling overwhelmed right now about your responsibilities during probate. Attorney Joel Mullen from Mullen Law Firm, P.A. can provide you with the advice and support you need to fulfill your duties with a minimum of stress. Contact our firm today for an initial consultation to learn more about how we can help you with the probate process, including by keeping accurate records throughout.