Executor of a Hoarder's Estate? Oh My!
Hoarding is more than just being a bit messy (or buying a six-month supply of toilet paper). It is actually a mental disorder causing some people to have difficulty discarding items, regardless of their value, and to experience severe distress even at the thought of it. If you have been named as the personal representative of a relative’s estate and discover that the deceased person’s home is packed, floor to ceiling, with collections, clothing, old mail, books, and papers, what should you do?
First, consider carefully whether to accept the job. If you live in another city or have a busy job or many family responsibilities, you should think twice about administering a hoarder’s estate. Cleaning out the home, locating money and property, and getting it ready for transfer or sale are likely to involve a substantial amount of time and effort. If you have not yet been formally appointed as the personal representative of an estate, you can renounce the role by filling out a form and filing it in the probate court that will handle the case and notify the beneficiaries or heirs of the estate. If you already have accepted the role, you must petition the court for removal if you decide you do not want to fulfill the role.
The personal representative must identify all of the deceased person’s money and property and gather them for safekeeping. First, check to see if the will makes specific bequests and make sure those items are secured and preserved. Then, begin the process of sifting through all of the hoarder’s other property to find items of value. Keep an inventory of any cash or valuables you locate.
Resist the temptation to simply throw everything away. Although much of what makes up a hoarder’s estate may appear to be trash, there may be valuable items hidden in the midst of what seems to be rubbish or in other unlikely places.
Consider getting help. In the case of someone who was simply a mild hoarder or packrat, it may be worthwhile to hire a professional cleaning crew. In more extreme cases, in which there are environmental hazards such as mold or vermin, an environmental remediation company may need to be hired before any further work can be done. Note: It may be necessary to obtain permission from the court if the expense for the cleanup is out of the ordinary. In some extreme cases, the cleanup may take weeks or even months and involve substantial expense. The court should be given a reasonable estimate and an itemized list of the work that must be done, and it may be prudent to take before and after photographs of the home and its contents.
Determine the fair market value of any items of value that you locate. It is important to determine the value of non-cash items at the date of death, typically by hiring an appraiser, to avoid undervaluing the estate and underpaying any estate taxes that may be due, as this could result in significant penalties. In addition, if the estate will be divided evenly between heirs or beneficiaries, the personal representative can use the valuation to divide it properly.
Carefully document the condition of the property and the time spent sorting and cleaning. If the deceased person’s will does not specify the amount you, as the personal representative, should be paid, state law will determine the amount of compensation, often a certain percentage of the estate, a percentage of the transactions made by the estate, or a reasonable fee that is determined by the court. However, a personal representative may be entitled to an additional fee in some states if “extraordinary” services are provided. In dealing with the estate of an extreme hoarder, the personal representative may be able to claim a fee for extraordinary services if he or she can document that the duties of administering the estate were above and beyond the typical estate administration.
Get estimates and make repairs. Sometimes, particularly in the case of an extreme hoarder, the residence may have suffered damage due to the hoarding, for example, scraped walls, broken windows, or scratched floors. If the house is to be sold, it may need to be repaired prior to the sale. To prove that the repairs were done for a reasonable price, you should obtain estimates that can be provided to the court.
Charge expenses to the estate. Although this will reduce the value of the estate, it may also reduce estate tax liability.
The foregoing points are some of the particular considerations relevant to the administration of a hoarder’s estate, but the personal representative of an estate has a number of duties that should be discussed with an experienced estate planning attorney before and during the administration process.
We Can Help
Administering any estate can be stressful, particularly if the deceased person was a loved one for whom you are grieving. If you are administering the estate of someone who was a hoarder or even had an extensive collection of particular items or memorabilia, the process can be even more burdensome. We can advise you about the proper steps to take in the administration process, both to enable the process to proceed as smoothly and quickly as possible, but also to help you avoid conflicts with heirs or beneficiaries and potential liability. Please call us today at (423) 648-9829 or go online to schedule an appointment. We are happy to meet with you by phone or video conference if you prefer.