Q. My Aunt Fran called me to ask if I would be the executor of her estate. I am honored that she chose me because she must see me as trustworthy and responsible. Before saying yes, can you tell me what is involved?
A. The primary duty of an executor is called “fiduciary duty,” which requires you to act with honesty and good faith, and in the best interest of the beneficiaries of the estate. Even if you are certain that you can fulfill this aspect of the job, keep in mind that determining or delivering on someone else’s wishes often becomes a lengthy, involved, and arduous process that does carry the possibility of personal liability. If you mess up, the beneficiaries could sue you and you could be held personally liable for your mistakes. It would be up to you to prove to the beneficiaries that you acted in their best interest.
In addition, it is not uncommon for an estate to require two or more years to settle, during which time you have to stay on top of deadlines, filings, and notices, and perform tasks including:
- Probating the Will in order to commence the probate process, commonly called the “nightmare of probate”;
- Informing various persons of the death;
- Finding and managing the assets of the decedent before you distribute them;
- Setting up a bank account for the estate and pay expenses;
- Paying debts;
- Paying taxes;
- Filing complex and detailed annual accountings, that often take 80 to 10- hours to prepare;
- Distributing assets.
And the above list summarizes just a few of the most important duties of the Executor. A more comprehensive 6-page list of duties is posted on our website at:
http://www.farrlawfirm.com/UserFiles/File/Executor-Instructions.pdf. Be sure to review this entire list before you agree to take on the role of Executor for a loved one.
Finally, there are often strong emotions involved with surviving family members and loved ones, so an executor should be prepared to deal with family conflict.
Although it may at first seem like an honor to be named someone’s executor, it is definitely NOT an honor – on the contrary, it’s a nightmare of administrative paperwork that most people would not wish on their loved ones if they understood that there is a simple alternative which allows you to avoid probate. If you are unable to fulfill the executor duties due to illness or time constraints, you can decline—there’s no legal obligation to accept the job. Why might you want to decline to serve?
First, probate requires frustrating intrusion by the court, lawyers, and the public into a very emotional, private, family time. A judge may have to determine who is a legitimate creditor, and may have to rule on distributions to children and other beneficiaries. Your estate may have to hire a lawyer to shepherd the executor through the legal maze.
Second, all of the financial affairs of the decedent, and everything you do as Executor, will become public knowledge. The contents of the Will is filed in the courthouse for all to read. They are read by salesmen, by newspaper reporters, by con artists, by identity thieves, and by the morbidly curious, all seeking in one way or another to take advantage of the publicity required by the probate process.
Third, probate takes time. Unless you are absolutely certain that there are no debts owed by the estate (a rare occurrence, since almost everyone leaves some small debts behind) and are willing to accept personal responsibility for the debts, the Virginia probate law mandates that your assets not be distributed for one year after death, to allow creditors time to petition the court for full payment. Any assets distributed before that time come with a heavy cost for you as executor because you will be personally liable for the repayment of all of this amount, even if the beneficiaries to whom distribution is made have already spent the amount distributed. The court, not your family, will supervise and authorize the settling of all debts and the payment of inheritances, in its time and with its delays.
Fourth, on a national average the probate process takes from five to eight percent of your family estate out of the hands of your beneficiaries and gives it to the courts and other outside individuals. These fees can even be higher in the event of unusual circumstances, such as a will contest. Planning with a revocable living trust instead can save the average American family about $30,000 in probate fees, attorney fees, and court costs alone, according to a national study by the AARP. The up front cost of a trust is only slightly higher than just a will, but the savings in the end can make the initial expense more than worthwhile.
Being an executor of even a simple estate can be a complicated job. Consulting a Certified Elder Law Attorney, such as Evan H. Farr, will make your job simpler and ensure that the job is done right. Has being asked to assume the role of executor made you think about your own planning? If you have not done Long-Term Care Planning, Estate Planning or Incapacity Planning (or had your Planning documents reviewed in the past several years), or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, call The Fairfax Elder Law and Estate Planning Law Firm of Evan H. Farr, P.C. at 703-691-1888 to make an appointment for a no-cost consultation.