Coffee With An Estate Lawyer: Executor Duties
A term that often gets thrown around in estate planning is “executor“; however, most people really don’t understand the true meaning of it and what it entails.
That’s what Daniel and Arin, co-founders of Epilogue and experienced estate lawyers, discuss during this episode of Coffee With An Estate Lawyer.
They cover the true meaning of being appointed executor and many of the important tasks that come with the job.
What is an executor?
An executor is an individual or individuals named in a Will who are in charge of managing your estate and carrying out your wishes when you die.
They can sometimes be referred to as “Estate Trustee” or “Personal Representative”, depending on where you live.
What happens if you pass away without naming an executor?
If you die without a Will or naming an executor, it means you’ll have no say in who will take on this very important role. Someone will have to apply to be the executor of your estate and the court will appoint someone for you.
There are added costs and delays associated with the court process; however, that’s easily avoided by naming an executor in your Will. Naming an executor in your Will allows the process of wrapping up your affairs to be much faster and more straightforward.
How long can it take a court to name an executor?
It can take months for a court to appoint an executor if there isn’t one named in a Will. We were recently speaking to a woman who’s mother passed away without a Will. It took the court 9 months to appoint her as executor after she had applied.
This delay, added expense, and stress could have been avoided had her mother appointed her as executor in her Will.
Do you need to go to probate court if there is a Will?
Not necessarily, however, it’s common practice for executors to apply to probate court in order to be confirmed as executor when there is a Will.
These are relatively short and straightforward court applications.
What happens to all of the assets during the court process?
All assets, including bank accounts, are frozen during the probate court process so the longer it drags on, the more difficult it will be to wrap up affairs.
Allowances can be made to pay bills or take care of minors, but you can’t really get the wheels in motion until there is an executor.
Executor duties and responsibilities
Being an executor is a big job that comes with a lot of responsibilities and the list of duties is not a short one.
A big misconception is that an estate can be wrapped up in a matter of weeks. This is far from the case. It could take up to a year, or longer, for an executor to fulfill all of their duties.
Not everything needs to be completed immediately, there are some duties that require more urgent attention, like addressing funeral and burial wishes. And others that get done later on like notifying life insurance companies and applying for probate.
Here is a more comprehensive list of executor duties with an approximate timeline:
(Hard to see? Right click the image and save it to your computer for a high-resolution image!)
Who should be my executor?
There’s no one right answer. As mentioned, it’s a big job with a lot of responsibilities. So, it’s critical to choose someone you trust. This doesn’t necessarily mean it has to be a spouse or family member.
Think carefully about who you want to choose and what your relationship with them is. Think about how they might be able to handle the role.
The contents of the Will can also help determine the executor. For example, let’s say someone is married with no kids and left everything in their Will to their spouse. In this case, it might make sense to name the spouse as executor seeing as the entirety of the estate will be left in their hands.
Or, say, if someone is single and distributing things among several people, they will have to think about the right person to manage a more complicated executor role.
As mentioned, naming an executor can be a challenging–if not the most challenging–decisions you’ll have to make. Do it based on trust and who you think would be able to step into that role and do the job the way you would want it.
Can an executor also be a beneficiary?
This is a common question and the answer is yes. It’s actually quite common for an executor to also be named as a beneficiary. And, in many cases, it makes a lot of sense to have one person named as both an executor and beneficiary.
What is a corporate executor or trustee?
A corporate executor or trustee is someone you can hire to take on the role as executor if there’s no one in your life you think can handle the role.
If you have money held in trust for a minor, it could be decades before they get access to that money. Hiring a professional trust company ensures continuity to the role because a company can’t die, but an individual can.
This, of course, comes with added fees, which vary depending on the trust service you use. If you’re interested in a service like this, it’s a good idea to start having conversations now. A good place to start having conversations is with your bank to understand how their corporate trustee services and fees work.
Do executors get compensated for their work?
By law, an executor is entitled to compensation, regardless of whether or not it’s specified in the Will.
There are general rules the courts follow when awarding compensation to a trustee. If you want to specify a particular amount, hourly rate, or percentage of your estate in your Will you can do that as well.
This isn’t always necessary and there are some exceptions. In the example of a spouse inheriting the entirety of the estate, they wouldn’t be given compensation since they are awarded everything anyway.
Being an executor should never come as a surprise
The best time to have the conversation with the person you want to name as executor is before you’ve created your Will. You want to make sure they are committed to the role before you’ve made it official. If they aren’t up for it you have time to find someone else. If you’ve already completed your Will and they don’t agree to the job, you’ll have to make a whole new Will.
Make sure whoever you choose is fully aware of what comes with the job. Feel free to download and share the executor duties checklist with them to give them a sense of what’s involved.
That being said, there’s no legal requirement for the executor to sign or acknowledge their appointment.
There are many circumstances when someone finds out they are an executor after someone passes away. This is far from an ideal situation and one that’s best to try and avoid.
Watch the full discussion here: