When a loved one passes away, it is a difficult time for everybody, but it is especially difficult for those who were appointed executor and who, at the same time as mourning, have to handle the affairs of the estate, pay urgent bills, deal with beneficiaries, try to find the original will, etc. The closest analogy is being thrown into a deep lake whether one knows how to swim or not.
To top everything off, the executor has a fiduciary duty to the beneficiaries, and all decisions they make can be highly scrutinized if there is a chance of conflict in the estate matters.
So what are some of the priorities during this highly crucial time?
One of the first considerations on the part of the members of the family is to locate the most recent original will. Once the family reads the will and determines who the appointed executor is, that person has two choices: to act or not to act. If they choose not to act, they have to renounce their appointment immediately to reduce potential liability. If they want to act as an executor, they should contact an estates lawyer who can help them interpret the terms of the will and any special instructions, duties, and responsibilities that the executor is required to undertake.
If there is no will, then one of the relatives of the deceased will have to step forward and officially apply to court to be appointed executor.
Often times, funeral arrangements are paid by family. Regardless of this, where someone other than the estate trustee has contracted with the funeral home for the funeral arrangements, the estate is only liable to reimburse that person for the cost the estate trustee might reasonably pay in the circumstances.
Another important step is to secure and preserve the assets of the estate: keys to any properties, safety deposit boxes, investments, active insurance policies, pensions, personal property (household goods, cars, jewelry, art, etc.).
The executor should also communicate with the beneficiaries in the will or the heirs on an intestacy about the possible benefits they are to receive.
At this point, the executor should decide whether they need to apply to court for the Certificate of Appointment of Estate Trustee (“Certificate”). This is usually necessary if the deceased held real estate (not in joint ownership), large investments, etc. A Certificate is a document through which the court certifies that the will is valid (if there is one) and that the court officially recognizes the authority of the executor to administer the estate.
Once the Certificate is obtained, the executor’s lawyer will advise how to pay all the debts, prepare final accounting, prepare tax returns, and then distribute what is left to the beneficiaries.
As one can see, administering an estate can be very time intensive, which is why the executor is entitled to compensation, within limits.
This is a very high-level picture of the estate administration process. Many issues can arise throughout the administration, but what is important to note is that in accepting the appointment of executor, one is held to a high standard and has a fiduciary duty to make decisions in the best interest of the estate beneficiaries. The liability is very high, including being held liable for debts of the estate if not properly administered.
If you have any questions about this topic, I would love to help!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
