Sometimes, new assets turn up after the probate process has been closed. An executor has some options, although prevention is always better.
I met a woman recently who always handled the finances for her family. Her husband made the money; she spent it. Her husband was a contractor, so she also handled all the taxes, deductions, and business expenses. In the days before Excel, this involved filing cabinets full of paperwork, and she somehow always knew where everything was. She did an incredible job managing everything, saving them thousands of dollars over the years.
And then she suddenly passed away.
Her husband went down to the courthouse, started the probate process, and became her executor. In an instant, he was the sole owner of that tower of filing cabinets—along with everything else she had squirreled away for a rainy day.
So far, he’s discovered a checking account, a Roth IRA, and several thousand dollars’ worth of antiques, none of which he knew about before. And I can’t help wondering just how badly this could all be going if it were a more complicated situation—if her older sister were still alive, for example, or if she had more than one child.
There is every chance that he will account for her things, close the probate process, and then discover an unexpected asset somewhere in the bottom of a drawer. After all, he’s only human, and being an executor is a huge job. Accounting for someone’s entire financial life can feel overwhelming . . . because it is.
But discovering assets after the probate process has been closed can cause a whole host of new problems. So, what’s an executor to do?
The Executor’s Job: Accounting for Assets
In Virginia, an estate executor handles all of the assets connected to an estate. This means they must locate, secure, evaluate, and manage everything of worth in the estate. Often, they must decide what to liquidate to pay for expenses, taxes, or debts, before distributing the remaining assets to beneficiaries.
They are also responsible for creating and providing an accurate list of all assets to the local Commissioner of Accounts (appointed by the circuit court). Then, the executor must make a yearly report of all remaining assets and any activity, such as receipts, distributions, payments, etc., until they make the final accounting, and probate is closed.
As you’ve probably guessed, this process can be incredibly tedious and quite lengthy for everyone involved. It also puts a huge amount of pressure on the executor to do everything just right.
If you’re going it alone, here are some common estate assets to look for:
- Homes & real estate
- Vehicles
- Bank accounts
- Retirement accounts
- Insurance policies
- Investments
- Valuable property/collectibles
- Personal belongings
Unexpected Assets to Look Out For
There are certain types of assets that executors tend to overlook. Some of them have little or no documentation and can’t possibly be listed until those who know about them come forward. Others seem sentimental or not valuable enough to bother with, until their true worth is discovered.
Executors Beware! These are the tricky ones:
- Digital assets like photos and videos, emails, social media accounts, documents, etc.
- Loans to family or other private loans
- Pets or other animals, including livestock
- Stock certificates
- Pension plan documents
- Obscure valuable property
Sometimes, very few people know about these assets, such as a private loan that was settled on a handshake. If no documentation exists, it can be difficult to verify the money owed to the estate.
Even if documentation does exist, if very few people know about the asset, it still might be overlooked. Old stock certificates and property deeds have been unearthed years after a relative’s death, since no one thought to look for them when the person passed.
Sometimes, personal possessions, such as antique furniture or paintings, can turn out to be quite valuable, and no one realizes it until the probate process is over. These possessions were listed during the probate process, but they weren’t properly valued, and that causes problems.
What Happens When New Assets are Discovered After Probate?
When new assets turn up—or old ones turn out to be valuable—after probate has closed, the executor has a few options:
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Check the Will.
Some Wills mention overlooked assets and provide instructions for how they are to be handled. This would be the simplest option, but it depends on the person who wrote the Will and whether they thought of this possibility.
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Consult with a probate attorney.
This one is the best option for most people. An experienced attorney can partner with an executor to take care of things easily and quickly, sometimes without opening a new probate file. That’s right; depending on the type and worth of the new asset(s), an experienced attorney may be able to resolve the issue legally without sending the executor back to court.
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(Maybe) Open a new probate file.
Meeting with an attorney may help prevent this step. If not, once a new probate file is opened, the executor must follow the same steps as before—securing, evaluating, and distributing the new assets. Now, the estate could owe more taxes, creditors might make new claims against the estate, and beneficiaries may be entitled to a share of the newly discovered assets. Welcome to probate . . . again.
Prevention Is Better
Working with an experienced attorney from the beginning of the probate process can prevent an executor from overlooking assets in the first place. An attorney can help break down complex legal documents into manageable tasks and partner with you to help accomplish those tasks, preventing mistakes before they occur. Being an executor is a huge, complicated job. A knowledgeable partner can make it easier.
Being an executor is hard. You don’t have to do it alone.
Whether you’re just starting probate or dealing with a surprise asset after everything’s been wrapped up, the legal steps can be confusing – and mistakes can be costly.
That’s why we offer a complimentary Mind at Ease consultation. We’ll help you understand the next steps and avoid common missteps that can come back to haunt you later. Call us today at 757-866-3730 to schedule your consultation. We’re here to make a hard job a little easier.
