It can be a rewarding feeling to find out that a friend or loved one has named you as the executor of a will. After all, it is a great honor to be entrusted with something as important as settling another person’s estate when he or she dies. Many people often experience a sense of self-satisfaction as well, and that too is normal. After all, how many of us don’t feel good about ourselves when we’re given the opportunity to serve someone else? At the same time, though, there is more to being an executor than just rewards. There are also a wide range of important responsibilities and risks associated with the job. Before you decide that you can handle the role, you should be aware of those executor duty risks so that you can protect yourself.
What Are the Responsibilities?
Being an executor is no simple task. In fact, it is a job that can require a year or more of your time and attention, fulfilling various responsibilities required to bring the decedent’s estate to a proper resolution. The job can be at times mundane, often complex, and almost always thankless. It begins with your appointment by the probate court and ends with a final accounting and request for that same court to formally close the estate.
In between those two events, you’ll be tasked with things like organizing the decedent’s records, locating and securing his assets, and appraising everything so that you can determine the actual value of the estate. There are creditors that need to be identified and provided with notification so that they can level legitimate claims against the estate. You’ll have to sort through those claims, evaluate their validity, and pay any legitimate debts. You will need to prepare and file income taxes and determine whether any estate tax filings need to be made. And when all those things are done, you will need to ask the court to distribute the remaining assets to the deceased’s heirs.
Obviously, that’s a lot of responsibility for any one person to take on. Many of the tasks may require outside experts like accountants, lawyers, and appraisers to ensure that everything is managed properly. You’ll need to maintain careful records of your activities, and be open and transparent about your work so that there is never any question about your integrity. These things should be considered before you decide to serve as an executor.
What Are the Duties?
Executors also owe a duty to the estate and to its beneficiaries. Once you agree to serve as an executor, you are agreeing that your interests will be secondary to those of the estate and the decedent’s heirs. That is a fiduciary duty that requires you to ensure that you are acting in good faith to secure the interests of everyone involved. That duty requires you to use the same level of care that you would while handling your own affairs, and recognize that you are ultimately responsible for the way that the estate is settled.
You also must be fair in your dealings with all heirs, giving preference to none, and avoiding even the appearance of any conflict of interest. You cannot try to benefit from the estate except as directed or permitted by the express terms of the will. You must also use sound judgment where any asset liquidation or investment decisions are involved.
What Are the Risks?
Given the responsibilities and fiduciary duties that the executor role requires, it should be no surprise to learn that there are risks as well. Obviously, if you are required to exercise care and due diligence in the execution of your fiduciary duty, there must be the possibility of consequences resulting from any failure to meet that standard. The fact is that executors sometimes fail to properly meet their responsibilities either through neglect or willfulness, and that failure can have a dramatic impact on the value of the estate.
Let’s be clear about this: if you willfully act in a way contrary to the best interests of the estate and the heirs, you could leave yourself open to legal action. That should be obvious. But the danger can extend well beyond such willful actions, as you could also be liable if you are found to be negligent in your handling of the estate. You could also be taken to task if you are believed to have acted with fraudulent intent or a lack of ethics.
Of course, most executors never face such dangers, but that doesn’t mean that you shouldn’t work to insulate yourself from all the risks associated with the executor role. The following steps can help to limit your potential liability and make your task easier to manage:
- If possible, consult with the testator prior to death. Review the will to ensure that you know precisely what he or she is trying to do. That can help to avoid confusion and conflict that could prove troublesome for you later.
- Ask the will-maker to simplify the estate where possible. That can make your task easier and help to minimize the risk that mistakes might be made in the will.
- After the decedent’s death, be as transparent and communicative with heirs as possible. Often, lawsuits and complaints arise from a lack of transparency, since that can engender distrust and suspicion and leave even your most benign actions open to false interpretation.
- Always work to avoid any self-enrichment that might result from your handling of the estate. If you’re named as an heir, then treat that inheritance exactly as you treat those of the other heirs in the will.
At Kulas & Crawford, Medicaid & Estate Planning Attorneys, our estate administration experts can provide you with the assistance you need as you try to navigate the probate process and fulfill your executor duties. We know how difficult it can be for many executors to manage these complex responsibilities while meeting their fiduciary duty, so we’re committed to helping clients just like you mitigate any possible liability and risk as they work to fulfill this sacred trust. To discover how we can help you to protect your interests while serving as an executor, contact us online or call today at (772) 398-0720.