Estate planning is all about protecting your loved ones. Life is unpredictable; therefore, every individual needs an estate plan to ensure that all your assets (physical, financial, and online) are inherited by the people to whom you want them to be transferred after your demise. Without an estate plan, heirs could face enormous tax burdens, and the courts will decide who gets your assets and even who gets to raise your children. It is a dynamic process that needs to be reviewed regularly to absorb changes in our life.
Estate Planning is an essential part of life. It can be for preserving family wealth, providing for surviving spouses and children, funding children’s and grandchildren’s education, or leaving their legacy behind for a charitable cause.
After the person’s death, an executor of estate shares the assets with the beneficiaries. The property and assets include Financial Holdings( stocks, bonds, money, market investments), Real Estate, Direct Investments, Collectibles like art, etc. Service as an executor lasts around a year, depending on the size and complexity of the estate.
What Is the Executor Of A Will?
Estate planning covers how an individual’s assets will be preserved, managed, and distributed after death. An Executor of Estate (typically a lawyer, accountant, or family member) is the deceased’s legal representative. The Executor of Estate has the power to dispose of the assets of the dead. An executor must know:
- About the original Will.
- The names and contact details of attorneys.
- Copy of crucial documents, etc.
The Executor of a Will should discuss the relevant details with beneficiaries to prevent any issues in the future.
Criteria To Appoint An Executor
Choosing an executor for your Will is a task that you should perform with utmost care and precision. Here are some essential criteria that the Executor of the Will should fulfill.
- Honest and trustworthy.
- Willing to take on the responsibility.
- An adult above 18 years old should be mentally competent.
- Either a beneficiary to the Will or a third person.
- Liable for any errors, even if the execution has occurred in good faith.
- Familiar with financial matters.
Duties And Responsibilities Of An Executor Of Will
An executor is a crucial person for the execution of the Will and has many responsibilities such as:
- To carry out the instructions to manage the affairs and wishes of the deceased.
- To deal with taxes and debts.
- Filing the Will in probate court and going through the probate process.
- Arranging the funeral and registering the death.
- Administering the Estate and keeping Estate accounts.
- Take inventory of the estate and determine value.
- Settlement of the assets per the requests made in the Will.
- Filing cases in court on behalf of the deceased.
- Representing the deceased in legal action.
- Payment of any outstanding debts and liabilities.
- Distribution of the estate among the beneficiaries.
- For wrapping up miscellaneous affairs that have remained outstanding since the decedent’s death.
Advantages Of An Executor Of Will
By appointing an executor of the Will, the family is relieved of the administrative responsibilities of executing the Will. Appointing the Executor in time will save time and money and prove advantageous to the beneficiaries.
The advantages Of Appointing An Executor Of a Will are:
- Cost-Effectiveness The costs associated with appointing an Executor of Will or appointing a family member are much the same. For instance, the costs associated with appointing an Executor are to pay for the assistance in filing applications and fulfilling other duties associated with estate management.
- Liability Protection An executor will protect the deceased’s loved ones from financial obligations and remove fiduciary duty.
- Impartiality Disputes and conflicts occur between family members regarding the division of an estate, and these arguments can cause issues with the estate’s administration. An Executor Of Will prevents conflicts and is impartial and fair. An executor ensures that the estate is administered according to the deceased’s wishes and always in the family’s best interests.
- Expertise An Executor Of a Will has expertise in dealing with tax affairs, property, investments, Trusts, and Probate matters, ensuring minimum confusion and maximum efficiency.
- Reduced Stress By appointing an executor, the deceased’s family is relieved from the stress of the administrative responsibilities of executing the Will.
- Safeguards Assets Executing a Will includes managing trusts, dealing with tax issues, making investment decisions, and transferring property. The role of Executor possesses the legal and financial expertise to implement complex directives and protect assets. A family member as an executive can take professional guidance to safeguard the assets.
Role of Executor of Will
The role of an executor is like a trusted friend and representative who disposes of or oversees the settlement of the assets of the deceased person per the wishes of the deceased testator, as enumerated in the Will.
The prominent roles of Executor of Will include:
- Role of an Executor in executing a will
The role of an executor is to execute the Will of the deceased. The Executor disposes of the assets of the deceased testator in terms of the Will.
- Roles of an executor in addressing personal and financial disputes
The Executor executes the Will and serves as a mediator between the deceased testator’s family members, ensuring a peaceful and proper estate distribution. An executor is responsible for resolving disagreements between the beneficiaries and legal heirs.
How Should I Prepare My Executor?
It’s essential to guide your Executor regarding how they should find your assets and deal with them.
- Inform your Executor where you plan to keep your last Will
It is significant for the Executor to know the location of the Will to start the probate process and to fulfill your wishes.
- Inform your Executor about the location of the property
The property’s location will help the Executor efficiently distribute this property to your heirs.
The Executor of the Estate Checklist
An executor of the estate needs to do the following:
- Locate the Will and other documents An executor should know about the original Will, deeds, insurance policies, partnership documents, or other important papers in an agreed-upon place and review them to determine whether there are any particular funeral directions.
- Make Funeral Arrangements An executor must cooperate in funeral arrangements and communicate with the funeral home to implement the deceased’s wishes. An executor is also responsible for obtaining a copy of the death certificate from the funeral director.
- Decide if you need a lawyer An executor can hire a lawyer if the estate has lots of different types of property, significant tax liabilities, or potential disputes among inheritors.
- File the Will and notify beneficiaries The Executor must file the Will in the local probate court and send notice of the probate proceeding to the beneficiaries.
- Locate and secure estate assets It’s the Executor’s responsibility to control the assets, such as Life insurance policies, Employment pay, Death benefit, Pension plans, etc. They are also responsible for deciding which assets to sell and distribute to heirs, as mentioned in the deceased’s Will.
- File the Will in Probate Court An executor should file the copy of the Will in Probate Court as the law in most states still requires filing the Will in probate court.
- Advertise for creditors Executors must advertise to creditors. The requirement to advertise for creditors varies from province to province. Some provinces allow you to advertise online rather than in the local paper.
- Pay Debts and File a Tax Return Executors must pay the debts that the estate is legally required to pay and File a Tax Return for the period from the first date of the tax year until the date of death.
- Distribute property The Executor of estate after death, must distribute the property such as cash, personal belongings, and real estate to the individuals mentioned in the Will.
- Close the estate The Executor has to ask the probate court to close the estate formally after paying debts and property distribution to the beneficiaries.
Challenges In Execution Of The Will In Absence Of An Executor
The consequences to be faced in the absence of an executor are:
- The process of inheritance of the assets and settlement of liabilities of the deceased will be affected.
- The Will is challenged as each legal heir claiming any interest in the deceased’s estate will have to prove their claim.
- Without an executor, the estate will fall into chaos, resulting in mismanagement of the deceased’s estate.
- If the legal heirs disagree on the valuation, the deceased’s assets will become challenging in a court of competent jurisdiction.
- Without an executor, Will will be subject to disagreements and delays, impacting the distribution of the assets according to the deceased’s final desires.
Can My Executor Be A Witness To My Will?
Rules for an executor to be a witness in the Will varies by state. In most states, for a Will to be legally valid, you need two people to witness and sign the Will. One can take help from an estate attorney in their area about the witnessing requirements. But if the executor is receiving benefits from the will, then there is a likelihood that they cannot be declared a witness in your will.
What Happens if Will's Executor is dead?
When the Executor of the Will is deceased, in this case, it is a matter of speaking to your estate attorney to update your Will to name another person. If you and your Executor die together without naming an alternate, the probate court is forced to determine how to handle your estate.
Can a beneficiary be an executor of a will?
Yes, a beneficiary can be an executor of a Will, and an executor of Will can be a beneficiary. When a beneficiary serves as an executor, notifying other beneficiaries and locating the deceased’s assets will be more accessible. The only situation in which a beneficiary cannot act as an executor would be when the individual is generally unqualified to serve as an executor.
What An Executor Cannot Do?
There is a certain list of what an executor cannot do. Let us have a look.
- An executor cannot go against the estate’s wishes and misappropriate assets.
- An executor cannot self-deal and sell the estate assets below market value.
- An executor cannot carry out the Will before the creator dies.
- An executor cannot sell the property without completing the beneficiaries’ due diligence.
- An executor cannot sign a Will on behalf of the deceased.
- An executor cannot change any provisions in a Will.
- An executor cannot change the beneficiaries named in the Will.
- An executor cannot lie, cheat, and steal.
- An executor cannot take unreasonable expenses
- An executor cannot fail to keep records of every single expense
Executor's Compensation
Executors have a tremendous amount of work and take significant amounts of time out of their lives to accomplish the tasks. The Will should include the Executor’s fees.
One can pay an Executor a flat fee, an hourly rate, or a percentage based on the estate’s gross value. When someone fails to specify how much the Executor will be paid, the court determines how much the Executor will be paid. An executor’s fees vary according to the state based on estate value.
Conclusion
An executor of estate is a crucial person in the execution of the Will; hence, only a third person, both responsible and neutral, can do the right by all the nominees in question. There are various estate assets located in multiple jurisdictions around the United States. Therefore, the work of an executor of estate is increasing in scope and complexity.
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