Most people only become an executor after the death of a loved one. It’s something that you hope to do no more than a handful of times, and, as a result, executors often lack experience before being thrust into the role.
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Some courts coordinate crash courses by volunteer attorneys or offer short, generic guides. More commonly, executors leave the court armed with only their letters testamentary and a vague idea that they should follow the will.
Many non-professional executors are friends and family, so they are often grieving themselves, all while trying to learn the ropes of this new role. And, when the heirs are friends and family, there’s an added social pressure to be the executor and a good one.
What Does It Take to Be a ‘Good’ Executor of a Will?
People other than attorneys can be excellent executors. That’s because handling an estate can is similar to running a small business, and many skills and backgrounds provide helpful experience.
Executors can find themselves wearing many hats. For example, they might take on the duties of an accountant, tax preparer, errand runner, handyperson, and family counselor, just to name a few.
Some estates pose more challenges than others. Some come from the types or quantity of assets, but others come from complicated family dynamics amplified by grief and the loss of a loved one.
Although executors can get caught up in the minutia of administering an estate, the overall goal remains the same every time: administer the estate according to the decedent’s will and your state’s probate laws. Doing these things eliminates the executor’s liability and honors the decedent’s wishes, but it is easier said than done.
Tips for Being the Best Executor Possible
Executors usually find something unique about their estate regardless of which tutorial they turn to. Unfortunately, this makes the application of step-by-step instructions challenging. Instead, you can use these principles to guide your actions as you navigate any estate's unique aspects.
1. Remember your fiduciary status
The key to success in administering an estate lies in staying true to the fiduciary role.
When the court appoints an executor, it instills a heightened duty in that person by making them a fiduciary of the estate. When acting as a private individual, you can work in your own best interest, and, indeed, doing so is a cornerstone of capitalism. Conversely, a fiduciary acts on behalf of another and puts their client’s interests above their own. Other fiduciary relationships include doctor/patient and lawyer/client.
Fiduciaries must avoid self-dealing, making a profit or benefit beyond that explicitly stated in the agreement. For example, executors can charge a fee for administering the estate, but they cannot buy estate assets below market value.
If someone contests a fiduciary’s actions, the court applies the prudent person standard. The law does not expect the executor to be an expert. Instead, the law expects the executor, or any fiduciary, to act in a way that preserves wealth and takes only reasonable risk.
2. Communicate with the heirs
As with any other job, executors benefit from applying soft skills. Embracing the human element can elevate an executor from adequate to good.
Most people lack a realistic expectation of how long it takes to administer an estate until they do it themselves. Accordingly, expectation management can go a long way in keeping family relationships cordial and helping heirs feel empowered instead of strung along.
Heirs might anticipate getting a check or beloved heirloom in a week or two, so it comes as an unwelcome surprise when the estate administration takes much longer. You can manage this by letting them know early in the process what you expect regarding the timeline for securing the assets, paying bills and creditors, and making distributions.
3. Maintain clear records
Depending on the state, the executor may need to submit an estate inventory or accounting to the court throughout the probate process. Even if the court does not require it, the heirs could request a record of the estate transactions.
Most heirs want to know the total value and the different items in the estate. Accordingly, take care when adding up assets to present an accurate picture to anyone who requests it.
Transparent accounting also increases the likelihood that you will make distributions and pay the estate’s expenses accurately.
One easy way to improve accounting is to open an estate account. It gives the executor a place to put assets and a way to pay bills and keeps transactions separate from their finances.
4. Don’t forget the creditors
Most media and pop culture references to estate administration focus on distributing funds. Unfortunately, being an executor is much more than sitting behind a big desk and handing out inheritances – paying the bills can form the bulk of your duties.
Much to the disappointment of many heirs, debts due to creditors usually take priority over distributions to heirs.
Each state sets the length of time a creditor has to file a claim against the estate and can require that executors provide notice to the creditors. The notice lets the creditors know that an estate exists and how they can contact the executor to make a claim. In some states, the notice to creditors shortens the claims window from a year after the decedent’s death to a few months from the date of the notice.
Once all the bills come in, some estates end up being insolvent. Executors then end up with the unenviable task of liquidating the estate to pay its debts and dealing with disappointed heirs.
5. Don’t make payments or distributions too soon
Unexpected claims against the estate can lead to an executor’s worst nightmare: the need to ask a beneficiary to return money or assets that you already distributed. Besides wounding your pride, it may not be successful – after all, the heir could quickly spend the money and not have it to give back.
While executors most often find themselves in this situation when they receive an unexpected claim from a creditor, it also happens when they forget that the estate may owe federal or state taxes.
Some executors balance this concern against the interests of heirs who want speedy payment by making partial distributions.
6. Be transparent about your fees
Every state allows executors to charge a fee for their work for an estate, and those fees may come out of the estate before beneficiaries receive any distributions. As a result, executor fees sometimes become a point of contention between the executors and heirs who feel shortchanged.
States follow one of two fee structures for executors.
In some places, executors can collect a fee based on the estate’s value. For example, Texas permits executors to charge five percent of the estate’s value.
Often, state probate laws create a tiered basis where the percentage decreases as the estate increases. This recognizes that executors encounter a lot of work upfront to get the estate started but that a bank account with $100,000 isn’t harder to deal with than one with $10,000.
Many states lack a specific maximum fee amount and require that executor fees be “reasonable compensation.” In those states, the reasonableness of fees stems from typical rates executors charge in that area, the complexity of the work completed, and the qualifications of the executor. The executor may need to declare their intended fee before being appointed.
7. Understand the probate laws of your state
Good executors know the limits of their authority and discretion. In many ways, executors are simply managers who carry out the decedent’s wishes according to the state’s probate code.
Following your state’s probate laws will prevent many of the errors mentioned in this article and prevent your work from being overturned by the court.
8. Be ready to investigate
Executors who administer expertly planned estates will have a different experience than those with minimal or haphazard estate planning. If you become responsible for one of the latter, finding the assets may be a big part of your work, starting with finding the will.
Ideally, the executor locates all of the estate assets early in the process to make creditor payments and distributions to beneficiaries more efficient. If more assets are found after the estate is closed, you might have to reopen the estate to obtain the authority to take care of the new asset.
9. Rely on other professionals
Executors aren’t expected to manage every aspect of an estate single-handedly, and in some situations, that probably isn’t appropriate.
The needs vary based on the needs of the estate. For example, an executor may need an appraiser to value a jewelry collection accurately when a will states that it should be split 50/50. Just as a private person turns to experts for help, so can an executor.
Executors can find themselves working with attorneys, accountants, real estate agents, locksmiths, and many others.
10. Say ‘no’ if needed
All of these tips can give the impression that being an executor is a lot of work – it can be. Some people do not have the time or capacity to add that responsibility to already-full lives. Whether you are dealing with your health problems, raising little kids, or are at a demanding point in your career, there are many reasons that you may not be able to take on the role.
Becoming an executor is voluntary, and you can decline the position.
Most testators name at least one backup executor in their will specifically for this reason. Hiring an attorney to handle all the logistics could be a good option if you cannot shake the sense of obligation.
Finally, some families have the foresight to know that estate administration could further disrupt family dynamics, and all the nominees renounce their nominations and nominate a third-party professional. A professional’s executor fees may cost the estate more, but it can be worth it in the long run as family relationships are preserved.
The Best Executors Remember Who They Work For
The role of the executor often gets blurred because of their close relationship to the decedent or the surviving heirs. Competing interests, including the executor’s potential inheritance, can make it challenging to remain neutral.
Executors can feel confident in their work if they act as a fiduciary of the estate rather than a private individual with personal interests. By putting the estate and, consequently, the decedent’s wishes as declared in the will in the forefront they will be well on their way to being a “good” executor.