The Inherent Problems of Being a Will Executor
A will executor is someone who, after being appointed, is responsible for administering the last will and testament of the testator or deceased person. It is the job of this individual to follow the instructions or wishes of the deceased when administering his or her will or trust documents. The executor must make certain that all the assets are distributed exactly the way the testator instructed. An executor or executrix (female) is appointed by the testator or where there is no prior appointment, by the Court.
The responsibility of the will executor
The roles and duties of a will executor are many but the most important one is ensuring that every asset listed in the will is accounted for, together with making sure that all the assets are distributed to the correct beneficiaries. There are different types of assets that can be distributed upon the death of a person. Some of the common assets include immovable property, stocks, bonds, direct investments, and collectibles such as art, just to mention a few.
In order to have an estimate of how much the various assets are worth, the executor makes use of the date of death value or what is referred to as the alternative valuation date. It is also the task of the executor to make sure that all the debts of the testator are settled, and that includes taxes. Although an executor can be anyone, in most cases, a person who is appointed to be the executor is an accountant, an attorney or a family member.
The challenges of being a will executor
In as much as an executor plays a very important role when it comes to distributing the assets of the testator, that role is not easy. In fact, being tasked with executing a will involves a lot more work than some people are aware of. That is why it is important to have a good understanding of the inherent problems of being a will executor before acting as one. Some of these problems or challenges are discussed below.
- Disputes among co-executors
In certain instances where a parent has several adult children, all the adult children may be appointed co-executors. The main reason is usually to avoid the issue of favoritism. Unfortunately, that arrangement does not always work well. For starters, some of the children may have moved out of the state or country. That alone makes it harder to deal with certain hands-on activities like selling a house or securing assets.
Some of the adult children may not have the financial literacy required when dealing with creditors or have the necessary understanding of tax issues, or even just the standard accounting skills that enable them to handle the distribution of assets correctly. Having more than one executor also means more paperwork is involved because there are certain documents or forms that will have to be signed by all the executors; even if they don’t reside in the same state or country.
- Disagreements with the heirs or beneficiaries
It is also very common for executors to face situations that involve disputes with heirs. Basically, securing the assets of the estate of the testator and then distributing those assets to the beneficiaries as directed by the deceased is the main duty of the executor. However, it can happen that certain heirs can even go to the decedent’s house prior to the funeral in order to cherry-pick heirlooms and other valuable items. The will may also be drafted in such a way that it gives the executor a lot of freedom when making the disbursements. For instance, the will may state that the executor can sell the immovable property and distribute the cash. So, by following the specific instructions of the testator, an executor can in the process be the cause of family disharmony.
- Time Consuming
Another inherent problem of being a will executor is that it is very time consuming. You have to be prepared to put in a lot of time and work to ensure that the estate is distributed correctly, according to the wishes of the testator. Take for instance the fact that the executor has to get in touch with different government agencies such as the Social Security Administration, the IRS and state tax authorities in the process of handling his responsibilities.
- Exposure to personal liability
Every executor is required to pay taxes that are owed prior to distributing the estate to the heirs. In the event that as the executor you make the decision to pay the heirs first and there aren’t enough funds available in the estate’s checking account to pay the various taxes, you will be held personally liable for those taxes. It is therefore necessary for the beneficiaries who are keen to get their inheritances to be informed that they are not allowed to receive their share of the inheritance until all the creditors, the IRS and any other person, company or government agency that has a claim against the estate of the deceased has been paid in full. The only exception is when dealing with proceeds from a life insurance policy set to benefit a particular beneficiary; creditors are not permitted to go after such proceeds.
Can executors be taken to court by disgruntled families?
Family members may not like the way an executor is handling the estate of the testator and may consider removing him from his position. In general, you cannot remove an executor from his position without the approval of the Court. However, it is important to note that Courts are usually unwilling to remove an executor from his position unless there are very strong grounds to do so. In general, Courts have the inherent power to make an order for the removal of an executor who is considered unfit to act in such capacity.
Although the role that is played by executors in terms of distributing the estate of the testator is very important, that role is also not easy. Before you start handling the distribution of assets, make sure that you learn as much as you can about estate administration. That way, the process will go a lot smoother for you.