An executor/executrix (personal representative) are essentially the managers of an estate. That means they have a fiduciary duty to the decedent as well as her heirs to carry out their work to the best of their ability, and to do so in an organized and transparent fashion. They act, in essence, on behalf of the deceased person to fulfill his or her wishes as described within his or her estate plan. Consequently, a personal representative cannot be careless, inattentive, or use the estate for personal gain.
An executor controls all the estate’s assets, which means he is responsible for paying its bills (creditors) and preserving the asserts of the estate such that the proceeds are maximized for the heirs. Personal representatives who are incompetent and/or disorganized, it almost inevitably lengthens and complicates the probate process.
If you are the executor, you need to understand the rules to stay out of trouble. Legal action may be filed against you if others think you are not correctly doing your job. If you’re a beneficiary in a will, incompetence or corruption could reduce how much you’ll receive from the estate.
No matter where you stand, Dickson Frohlich Phillips Burgess’s probate attorneys are here to not only represent you in your probate matters, but to help educate you on the law regarding probate.
What an Executor Should Do
If probate is necessary, the will is filed in the superior court where the person lived. Along with it should be a Petition for Probate. In it, the executor named in the will asks to be appointed to the job.
The probate court issues “Letters Testamentary” to the executor, proof that he or she (also called a personal representative) can collect and manage estate property. The executor’s most essential tasks are to …
- Find and examine the deceased’s important documents to learn the estate’s assets and obligations. The executor should also talk to family members to find out whether any information is missing.
- Collect, inventory and organize the deceased’s assets
- Manage the assets during probate
- Pay debts and taxes
- Distribute remaining assets to beneficiaries according to the will.
The probate process protects creditors and establishes the beneficiaries’ rights to the decedent’s assets. Things an executor can and cannot do depend on state laws and how they’re interpreted by the courts.
An Executor Must Properly Handle Money and Estate Assets
The executor needs to keep detailed, accurate records of how estate assets are handled and distributed. There should be an inventory of assets, with estimates of their value. In Washington, the inventory need not be filed with the court until an interested person asks for one.
The executor is responsible for the estate’s probate assets. Some assets, like life insurance proceeds and bank or investment accounts that have beneficiaries other than the estate are not part of the probate process.
Probate assets include anything owned by the deceased. They can be valuable, like ownership of a business, real estate, vehicles, art, investments, and bank accounts. Personal belongings may not be worth much money, but they may have an emotional connection for survivors.
An executor may or may not publish in a local newspaper a formal notice of the probate court proceeding. If it’s done, and a notice is sent to all known creditors, they have four months to make claims against the estate. Without a notice, creditors have two years from the date of death to bring claims, which can delay the probate process.
If there’s not enough money to pay the debts, the executor should follow state law and prioritize and pay valid claims on the estate. He or she will also need to file state and federal income tax returns for the deceased.
A federal estate tax return is required if the taxable estate is, for those dying in 2020, worth more than $11.58 million. The Washington estate tax threshold for 2018-2020 is greater than $2.193 million.
Only after debts and taxes are paid can assets legally be distributed to beneficiaries based on the will’s instructions. If there are assets left over, they would be given to the next of kin according to state law.
What an Executor Shouldn’t Do
An executor is a fiduciary. That means he or she is legally obligated to fulfill duties of good faith, trust, honesty, and confidence. This high standard is not optional, nor taken lightly by courts. Ultimately, he or she is required to act in the best interests of the estate and beneficiaries and avoid financial and legal conflicts of interest and self-dealing. Executors’ legal trouble is often related to their fiduciary duties.
What an executor clearly cannot do is go against the wishes of the estate and misappropriate assets (especially to themselves). What happens if an executor does nothing, does a terrible job, steals from the estate, or is dishonest?
Beneficiaries have the right to sue the executor for losses to the estate or for mishandling assets. If the beneficiaries prevail in their suit, the executor would likely be required to use personal funds to repay that which was lost or taken from the estate. The executor could also be removed from the job by the court. Potentially, if there’s strong enough evidence of fraud or embezzlement, the executor could be arrested.
Here Are Some Issues That Can Result in Legal Issues for Executors:
- Not using reasonable care and skill in managing the estate’s property
- Negligently or intentionally using estate funds for personal benefit
- Not following the will’s instructions
- Being sloppy or careless with maintaining records, collecting and organizing assets, paying debts or taxes, distributing assets to beneficiaries
- Wasting assets, such as failing to repair a home, causing more damage to it.
Are You Concerned About Things an Executor Can and Cannot Do?
Whether you’re an executor looking for legal guidance or a beneficiary who fears an estate is mismanaged, Dickson Frohlich Phillips Burgess can help. Probate is a highly specialized area of law. Our attorneys have the skills and experience needed to help you get the results you seek in as timely a manner as possible.
We are also committed to providing probate help and personal service at competitive rates. For more information or to discuss your concerns, call our offices in Seattle or Tacoma for a free phone consultation at 206-621-1110. We look forward to working with you.