What to Know When Naming an Executor
An Executor is a person named by a testator (someone who has made a valid will) to manage the concluding affairs of the deceased such as making sure debts are paid, accounts are closed, and the designated beneficiaries receive their inheritance.
When Family is Chosen as Executors
In almost all states, the testator can name a family member or friend as the Executor. It can even be a relative or a beneficiary of your estate.
An executor, by law, must carry out their fiduciary duty with honesty, diligence, and good judgment. Even if a person has agreed to be the Executor of your will, they can change their mind afterward – even after you’ve died.
Executors Receive a Fee
Even if your Executor is a family member, they are almost always compensated for their work. The fee is regulated by your state’s laws and comes from your estate.
Restrictions on Designating Your Executor
Most states place legal restrictions on who you may appoint as your Executor. The most common legal restrictions include the following:
- Executor must be a U.S. citizen
- Executor must be a competent adult
- Executor must not be a felon
- Executor that lives in a different state must usually comply with additional requirements
Meanings of Executor, Administrator & Personal Representative
Executor
If a person passes with a valid will, the person designated in the will to manage the estate is called the Executor. The Executor is in charge of the management and distribution of the estate’s assets.
Administrator
However, if the deceased passed without a will (or the will failed to designate an executor), depending on the estate’s value, the court will be asked to appoint what will be called an Administrator.
The Administrator will have the same responsibilities as an Executor.
Personal Representative
In most states, Executors and Administrators are generically referred to as personal representatives of the estate.
Should probate be necessary, a court will be tasked with appointing a personal representative when a person passes.
Whether it be an estate Executor or Administrator, it is their responsibility to manage the winding down of the decedent’s outstanding legal and financial obligations. But as you will see, these responsibilities can be extensive and complex depending on the size of the estate.
The Executors Role
Management Of The Estate
The management role of the Executor includes winding down the deceased’s personal and business affairs, such as:
- Obtaining multiple certified copies of the death certificate for closing accounts and facilitating stock transfers or sales
- Collecting all information about the decedent’s assets and liabilities
- Ensuring all necessary government entities are appropriately informed of the death.
- Communicating with government agencies, such as Social Security and Veterans Administration
- Leases may need to be modified or terminated
- Property may need to be sold
- Depending on the value of the deceased’s assets, the estate may owe taxes. A final income tax return must be filed, covering the period from the beginning of the last year of the deceased’s life until the date of death. (Dealing with the IRS)
The final and most important task is to ensure that the beneficiaries receive their inheritance per the will.
Large Estates Often Require Consultants
It is common for an executor who plans to take the bulk of the work alone may consult with a lawyer on specific issues they are unsure of or turn the more complicated probate process over to a lawyer entirely for an agreed fee.
Probate – Passing Without A Valid Will
The Intestate Process
As referenced above, should a person pass intestate (without leaving a valid will), a court may be requested to appoint an administrator.
The administrator will determine whether probate proceedings are required. State laws vary, and probate laws in most states will depend on the estate’s value.
In many states, it may be possible to legally give some assets directly to an intestate recipient, even if other properties are subject to probate.
Primary Reasons To Avoid Probate
Most wills and estate planners will advise you to avoid probate, and for good reasons.
Probate Is A Slow Court Process – It Can Be Painfully Time-Consuming
Probate can take considerable time — often up to a year or much longer if the will is contested and must be litigated among competing heirs.
Probate Can Be Very Expensive
The probate process and associated costs can run as high as six figures or more. One reason is that in most states, probate courts are entitled to receive a portion of the gross estate. Sometimes lawyers, forensic accountants, and investigators must be retained to facilitate the process.
Probate Court Hearings And Records Is A Matter of Public Record
No one wants their privacy violated – say nothing of having a family’s life open to public scrutiny – especially when debts and lawsuits are exposed.
Your Assets Are On Display
Public access to the details of confidential family assets and records presents can be exploited by criminals, especially in the age of identity theft, and digital hackers present their own set of unnecessary risks.
Locating A Trust & Estate Lawyer
If you have questions or require additional information about your specific legal rights and obligations, we advise you to consult with a verified online Wills And Trust Lawyer about your specific issues.
