If you have been named the executor of a deceased person’s estate, you are responsible for seeing that the assets of the decedent are distributed according to their wishes as described in their will and making sure that outstanding debts are paid. This is the process of estate administration. Although acting as an executor of an estate is a complicated and time-consuming process, an estate planning attorney, such as Marc A. Bronstein, a Professional Law Corporation, can provide you with advice and resources to make the experience easier and help you avoid any potential liability. In addition, an attorney is not required, but is recommended to represent you in probate court, if necessary.
Most states, including California, require that the will go through the probate process to be recognized as legally valid. Your estate planning attorney can tell you if there are exceptions that apply to your case, such as an estate valued at less than $150,000 which can be administered via a Small Estate Affidavit; however, you can anticipate that you will probably have to go to probate court. Even if you do not have to go through the probate process, as executor you will still need to file the original will in the correct probate court.
A major task of the Executor is simply locating and securing the assets of the deceased until they can be sold or distributed. The executor has some liberty in choosing which assets to sell and which to keep as long as the instructions in the will are honored. The Executor is also expected to locate and make contact with the individuals identified in the will. Usually the deceased has existing credit cards, bank accounts, and Social Security benefits that must be canceled. Importantly, the Executor of the estate has a fiduciary duty to the estate, and as such some actions can create liability for the Executor personally. Thus, it is recommend to seek legal advice prior to undertaking your duties as an Executor to avoid creating a problem for yourself.
It is common for the executor to set up a new bank account exclusively for the estate for the purpose of paying creditors: before inheritances can be distributed to the heirs, the deceased’s assets must be used to pay off existing debts. This also includes unpaid income taxes. The new bank account can also be used to make recurring payments, such as those for insurance policies and mortgages, for the duration of the will’s administration. Executors are discouraged from using their own bank accounts for these purposes. After locating and securing assets, finding the persons named in the will, canceling old accounts, and paying off debts and taxes, the executor can distribute the remainder of the estate to the heirs in accordance with the will’s instructions.
As an Executor of an estate, you are permitted to collect a fee for your time and energy. You are not, however, allowed to help yourself to the estate’s assets as compensation. You are expected to act honorably for the duration of the administration of the will on behalf of the deceased. We can explain the tasks of an executor to you in greater detail and help you be sure you are fulfilling your fiduciary duty correctly. Call Marc A. Bronstein, A Professional Law Corporation.
A common way to avoid Probate is creating a Trust. However, someone still needs to fulfill the wishes of the Trustor(s) pursuant to the terms of the Trust after their death. This person is called the Trustee. Like an Executor, the Trustee has a fiduciary duty to the Trust and its beneficiaries to act in good faith in fulfilling the terms of the Trust. In addition to distributing the assets of the Trust pursuant to the terms of the Trust, the Trustee would need to notify beneficiaries and pay any valid creditor’s claims. In California, if a Trustee distributes the assets of a Trust prior to the statute of limitations on debts of a decedent running, without proper security to recoup the distributions, the Trustee can be personally liable for any amounts owed to a valid Creditor. As such, it is always recommend to seek legal assistance from an Estate Planning attorney, such as Marc A. Bronstein, A Professional Law Corporation, in administering a Trust.