Guest commentary: You need to name an executor of your estate — now what?
By Brooks J. Hollister
The conversation of getting your future affairs in order can be an uncomfortable one, but it is a necessary one, nonetheless.
As Father Time remains undefeated, it is important to be prudent in contacting an estate planning attorney to assist you in creating your will and trust.
In doing so, one of the most crucial decisions you make will be in choosing who you want to serve as the executor of your will. This office comes with significant responsibility.
The probate process, from start to finish, is time-consuming.
Therefore, choosing the person or people you wish to administer your estate is a critical decision that can significantly impact the administration and distribution of your assets after death.
The person, or people, you choose to administer your estate must understand the qualifications and responsibilities required of an executor to dedicate the necessary time to fulfilling their duties effectively.
There are key considerations and responsibilities that potential executors and those naming their own executors should be aware of before making this important decision.
UNDERSTANDING THE ROLE OF AN EXECUTOR
The executor, also known as a personal representative or administrator, ensures that the estate is administered according to the terms of the will, or at the direction of the court. The executor is responsible for managing and distributing your estate according to the terms of the will and state law. Key responsibilities include:
• Probate Process: Filing the will with the local probate court and initiating the probate process.
• Notification: Informing beneficiaries, heirs, and creditors of the death and the probate process.
• Inventory and Appraisal: Compiling a comprehensive list of the estate’s assets and liabilities and obtaining appraisals if necessary.
• Debt and Tax Payments: Ensuring that all outstanding debts, including taxes, are paid from the estate.
• Distribution of Assets: Distributing the remaining assets to the beneficiaries as stipulated in the will.
More succinctly, the executor will need to obtain copies of the death certificate, notify beneficiaries, creditors, and other applicable parties, file a copy of the will with the probate court, settle any outstanding debts, file the final tax return, and distribute the assets.
QUALIFICATIONS OF AN EXECUTOR
The two most important qualifications of the person you choose should be trustworthiness and reliability. Additionally, the executor should have good organizational skills, some financial acumen and, if needed, access to legal and tax experts.
POTENTIAL CHALLENGES
Occasionally, disputes among beneficiaries can arise, leading to potential litigation. Executors should be prepared to handle conflicts diplomatically and fairly.
Because some estates are more complex than others, executors may need to work with various professionals, including attorneys, accountants, and appraisers. Estates with diverse assets, such as businesses and real estate in multiple states, or foreign assets, can complicate administration.
Executors can be held personally liable for mismanaging the estate. Understanding the legal obligations and potential pitfalls is crucial to avoiding personal financial risk. Choose someone who is not only willing and able to take on the responsibilities but is also prepared to seek assistance from professionals if the need arises.
UNDERSTANDING THE COMMITMENT
Administering an estate can be time-consuming, often taking several months, and in rare instances, years, depending on the complexity of the estate. Potential executors should be prepared.
That’s why it’s important to ensure the potential executor understands the time, effort, and potential stress involved.
Having a conversation with the person or people you intend to place in these roles about the commitment that comes with it can make all the difference.
They should assess their ability to manage these responsibilities alongside their personal and professional life.
Executors should not hesitate to seek help from attorneys, accountants, and other professionals.
This can help manage complex tasks and ensure compliance with legal and tax obligations. Additionally, maintaining meticulous records of all transactions, communications, and decisions made during the estate administration protects the executor and provides transparency to beneficiaries.
Executors are eligible to be compensated for the time spent providing their services. The will may specify the compensation, or state law may provide guidelines. This can be a percentage of the estate or a reasonable hourly rate.
An executor can also decline to be the executor. The court won’t force you, but the rules and procedures are different from state to state.
Typically, simply advising the court you’re declining will suffice. In that instance, the court can appoint someone else, or in many cases, a back-up executor is named, often a professional fiduciary.
Being an executor takes a great deal of time and energy and requires attention to detail, both legally and morally. Whether choosing an executor or having been chosen as one, choose wisely.
The decision you make will go a long way in facilitating a smooth estate administration and honoring the wishes of the deceased.
Brooks J. Hollister is an attorney at Carmel & Naccasha specializing in wills, trusts & estate planning as well as elder law and corporate and business transactions.
