Estate executor refers to an individual in charge of managing the estate of a person who has died. Estate administration duties will vary depending on the type and value of assets owned by the decedent and whether the estate is probated or protected through a trust.
Oftentimes, the estate executor of probated estates will require assistance from a lawyer or estate planner to ensure estate management procedures comply with probate laws. Probate is the legal process used within all 50 states to validate decedents' last will or appoint an estate administrator to manage intestate estates. Intestate means the person died without executing a last will.
During probate, estate administrators are responsible for organizing financial records, securing inheritance property, settling outstanding debts, filing a final tax return, and distributing assets according to directives outlined in the Will. With intestate estates, a probate judge instructs how inheritance assets are distributed.
In some states, probate personal representatives must obtain court confirmation. Other states allow estate executors to manage the estate without interference from the court. Additionally, some states require Administrators to obtain a cash bond, while others do not. Every state requires estate administrators be at least 18 years of age and never convicted of a felony. It is imperative to understand probate laws in the state where the decedent resided.
Careful consideration should be given to the appointment of an estate executor. Unfortunately, death can sometimes bring out the worst in people. It is not uncommon for heirs to engage in battle over who will receive inheritance property. In some cases, heirs will contest the will if they feel entitled to assets which were not bequeathed to them through the decedent's Will.
When heirs contest a Will, inheritance assets can be suspended in probate for months. Plaintiffs are originally responsible for legal fees associated with contesting. However, if the probate judge rules in their favor, the estate is usually required to reimburse legal fees. The estate is also responsible for defense legal counsel.
Contesting the Will can cause substantial financial hardship to the estate and potentially leave nothing for heirs. When possible, estate executors should attempt to arrive at a mutual agreement to avoid additional legal expenses.
When executing a last will, it is important to consider potential problems and implement strategies to prevent them. Individuals with estates valued below $50,000 can utilize strategies to avoid probate altogether. These can include assigning payable on death or transfer on death beneficiaries to bank accounts, financial portfolios, retirement accounts and life insurance policies.
Estate executors should be advised of the location of important documents and provided with a copy of the last will and testament. If financial records are kept in a bank safe deposit box, a key should be provided to the Administrator. It is also a good idea to provide copies of pertinent records to the probate executor. These should include life insurance policies, real estate deeds, automobile titles and property appraisals.
Last wills should be updated when major changes occur and documents provided to the estate executor. These could include adding new heirs to the Will, taking out individuals previously listed due to death or disinheriting heirs, or when real estate is bought or sold.
Taking time to put affairs in order is one of the greatest gifts you can leave loved one. Organizing records and executing a Will makes the job of the estate executor more manageable. This is particularly important when the designated estate administrator is a family member and can help them better manage the estate in the midst of their grieving process.
There are many facets to estate planning. We invite you to browse our estate planning article library to understand the various options available. Here you will find information and resources to help you make informed decisions about end-of-life planning.
Published on March 22, 2010 at 03:54 PM