Families that want to avoid probate do so mostly to reduce court costs and pass assets to children quicker than probate may allow. However, you might want to avoid probate for a different reason, to cut down on the legal risks your estate executor may run by managing your estate.
You may plan to have your child serve as your estate executor after you die. An executor does not require a legal background, so your child may easily qualify to be an executor. However, as Marketwatch explains, there are ways the legal system may hold an executor liable for not handling the estate properly.
Real estate issues
Some executors get in trouble when it comes to real estate. For instance, a will may require the executor to sell off a primary or secondary residence. The executor might try to fetch a higher price by using estate money to fix it up. However, depleting estate money runs the risk of defrauding the heirs of some of their inheritance, especially if the property does not sell for more money even with the improvements.
Conversely, an executor can get into trouble for not acting fast enough. If an executor does not put a home on the market in a timely manner, the home could sit unoccupied and fall into disrepair. This will lower the value of the home and make it harder to sell.
The loss of tangible assets
You might have a lot of physical property that you want your children to have. If so, you should know that your executor will take inventory of your assets and protect them from loss or damage. Some executors misplace or neglect pieces of property and find themselves the target of lawsuits from heirs because they did not take proper care of the property.
Making poor investment choices
Think about whether your executor will feel tempted to increase the value of your estate. Sometimes executors invest estate assets in the stock market if a settlement drags on for too long. This can be risky since investments can take a tumble in the market and cause loss to the estate. Some people try to remedy this by specifying in their will that an executor should conserve the estate and not try to increase its value.