Key Takeaways
- It’s essential to choose an experienced and reliable executor whom you can trust to handle your estate carefully and ensure your assets are distributed to the appropriate beneficiaries.
- An executor is the person responsible for marshaling and inventorying estate assets, managing the estate property, paying any outstanding debts, and distributing assets to beneficiaries.
- Qualities to look for in an estate administrator include organizational skills, financial acumen, communication skills, problem-solving capability, and availability.
- Be cautious to avoid key pitfalls, such as undermining the importance of the role, downplaying the complexity of your family’s estate, and selecting an inexperienced executor.
Introduction
As you get older, you want the peace of mind of knowing that your family will be taken care of and your affairs will be properly settled after you pass away. Proactive and thoughtful estate planning plays a key role in ensuring that your affairs will be handled in line with your wishes after your death.
Choosing the right executor is an important decision, as this person carries a crucial responsibility in ensuring the smooth and efficient distribution of estate assets. When you have the option of choosing an individual to manage your estate, this person is known as the executor. However, when there is no executor identified in a will, this person is known as the estate administrator.
When you identify an executor or nominate an estate administrator to manage your or your loved one’s estate, you want to choose the most reliable person for the role. Appointing a responsible estate representative will ensure that the probate process necessary to administer the estate is carried out with care and caution. This guide highlights the key factors you should consider when choosing an estate executor.
What Is an Estate Administrator?
An estate administrator is the individual responsible for administering your estate and settling your affairs after you pass away. In cases where a decedent left a will, an executor will manage the estate and distribute assets according to the instructions left in the will. If there is no will, an administrator appointed by the court will be guided by controlling state intestacy laws and probate laws to act in the best interests of the estate and its beneficiaries.
Some of the duties of an estate administrator include:
- Marshaling and inventorying estate assets
- Providing an accurate accounting of the estate’s assets, liabilities, and transactions to the court and estate beneficiaries
- Soliciting creditor claims, assessing their validity, and settling the debts
- Paying expenses like funeral expenses, appraisers’ fees, tax debts, medical bills, and other related expenses
- Maintaining accurate records of finances and transactions
- Distributing assets remaining after expenses and debts are paid to heirs or other beneficiaries according to the terms of a will or state intestate succession laws
It’s important to distinguish between an estate administrator and an executor. An individual named in a will by the will creator is called the executor, whereas an individual chosen and appointed by the courts because an executor was not named in a will or chose not to serve is called an administrator. While their duties are the same, the process by which they are appointed is an important distinction.
Still, both an executor and an estate administrator must be empowered by the probate court to act on behalf of the estate. Neither may take any action until officially appointed by the court.
Essential Qualities of an Estate Administrator
An estate executor or administrator has a fiduciary duty to uphold the best interests of the estate, so it’s crucial to choose someone who is well-equipped to take on the demands of the role. Consider all the following qualities in a qualified estate administrator.
Trustworthiness and Integrity
An executor has control over all the assets of an estate when administering it—in some cases, these assets can be extremely valuable, such as multiple properties or expensive family heirlooms like jewelry or artwork. Assets can range from real property and valuable personal estate property to bank accounts and investments.
It’s crucial to choose an individual you can comfortably trust to manage all these assets. You may opt to choose a trusted family member or friend to take on the role or a professional trustee for added peace of mind. If you are unfamiliar with an executor, you can provide yourself with additional peace of mind by requiring them to be bonded and insured before taking on the role.
Financial Acumen
Financial acumen is a crucial benefit for a skilled executor, who will have to manage remaining assets in an estate and distribute financial assets to beneficiaries. Understanding how to manage financial assets responsibly is important for preserving the financial value of the estate for beneficiaries while having to navigate paying taxes, managing estate payments, and soliciting creditor debts.
This acumen becomes even more important the more assets an estate has, as an executor may need to consider how to manage investments, sell real estate property, and decide when to liquidate assets to maximize financial returns for the estate and its beneficiaries. A skilled executor also knows when to ask for support from individuals like investment brokers and financial advisors.
Organizational Skills
Estate management involves a significant amount of paperwork, from filing petitions for the court to handling the decedent’s bank statements and property titles. An executor will also have to keep up with necessary deadlines for processes such as notifying beneficiaries of updates to the process, soliciting creditor claims, and filing court petitions. With all of the important tasks involved, strong organizational skills are crucial for ensuring the responsible fulfillment of one’s duties and avoiding common executor mistakes.
Problem-Solving Skills
An executor may face potential disputes or unexpected challenges, as estate administration can often involve disagreements between beneficiaries, such as inheritance disputes or will contests. Executors and administrators may also face additional challenges when administering the estate, such as sorting through and validating creditor claims, determining the line of succession for heirs, or navigating unforeseen issues when managing or selling properties. Problem-solving skills are crucial for ensuring that the administration of an estate can continue without significant disruption.
It’s also important that a chosen executor is not too prideful to ask for support and guidance when solving problems. Effective estate administrators and representatives know when to engage professionals, such as a probate attorney, financial advisor, or tax advisor, among others.
Communication Skills
A personal representative must keep all beneficiaries, heirs, and other interested parties in an estate reasonably informed about the estate’s administration and any related transactions. They are also expected to report to the probate court regarding financial matters, document and communicate estate asset transactions, and address potential conflicts that may arise among beneficiaries, heirs, creditors, and other interested parties. All of these tasks require strong communication skills.
Family dynamics in a probate case can also be challenging to navigate, as probate can be a contentious and sensitive process. An executor’s communication skills should include the ability to respond and act with patience and empathy in difficult situations. This includes being able to make difficult decisions to uphold the wishes of the decedent and communicate why these decisions were made, even in circumstances where some family members may not fully agree.
Availability and Commitment
The estate administration role encompasses many responsibilities and can involve a significant amount of time to complete all necessary steps, especially in the case of complex estates. It’s essential to confirm that the executor is available to take on the responsibilities of the role and make the necessary time commitment needed to settle the affairs of the estate.
An executor may be able to receive some compensation for their services, but it is often not a significant amount, so it’s important to be conscious of the fact that this person must be willing to dedicate a considerable amount of their time to this position in between their other personal responsibilities.
Deciding Between Personal and Professional Executors
As you consider choosing an executor, you may be caught between choosing a close family member or friend and appointing a professional fiduciary to administer the estate. There are pros and cons to each side.
A personal acquaintance might have a closer familiarity with your estate, the parties involved, and what your wishes entail, but they will likely be inexperienced in navigating probate and the necessary steps. If your estate is simple and rather straightforward, a close acquaintance may be able to handle the administration of the estate with the support of a skilled probate attorney to provide additional guidance when needed.
Meanwhile, a professional executor may be more costly, but they will have a lot more experience when it comes to managing estates. If you have a complex estate that involves many assets and may require possible contingency plans, it may be better to engage the support of a professional executor who has proven experience in managing estates.
Legal Considerations in Estate Administration
When administering an estate, an executor or estate administrator must have a firm understanding of their legal obligations to ensure they are fulfilling the interests of the decedent and their family. An estate administrator must consider the following.
Navigating State-Specific Laws
State-specific legal requirements can affect certain procedures or processes during estate administration. The state where your estate is located may impact several factors, such as court filing requirements and the level of probate that is necessary.
Varying state laws can influence factors like:
- Deadlines to file for probate
- Deadlines to accept creditor claims
- Statutes of limitations for will contests or legal disputes
- The amount of estate and inheritance taxes to be paid
- The complexity of probate, given the option for a formal probate vs. an informal probate
- The line of succession for heirs, if there is any lack of clarity about how assets should be distributed
States may also have unique considerations for who can serve as an executor and how they are appointed. For example, states require that an executor be of legal age, usually 18 years old, be a U.S. resident, and have mental capacity to serve.
Handling Unique Estate Needs
Every estate is different and may have different requirements. Although the steps you follow may be similar in most cases of estate administration, they can differ slightly in cases of complex asset portfolios.
For example, some estates may have property located in a different state or country, which may require an ancillary probate. A complex estate may also have to account for managing a diverse portfolio of assets, which may include responsibilities such as managing investments, selling properties, and accounting for estate taxes.
It’s important that an executor is committed to understanding all that is required of them in the probate process and has an understanding of the legal process for managing select types of property. This often involves seeking the support of a skilled estate administration attorney who can offer support in understanding the necessary requirements and contingencies for unique cases.
Avoiding Common Pitfalls
Appointing an executor is not just a checkbox to fill in the estate planning process—it is an important role with crucial responsibilities for properly settling a deceased individual’s affairs. It’s essential not to overlook the significance of the role and choose someone who is well-equipped for the role.
Other common estate planning mistakes include:
- Choosing an executor by only considering family relationships
- Disregarding the estate’s complexity
- Naming multiple executors without considering their ability to work together
- Failing to name an alternate executor
Many of the above mistakes can be prevented by being proactive and forward-thinking when considering the qualities of a responsible executor in your estate plan. Considering the responsibilities of an executor and the complex work needed to manage the unique affairs of the estate in advance will be beneficial for understanding how to choose the right fit for the role.
Naming Alternate Executors
It’s advisable to name multiple alternate executors in addition to the primary executor you name in your estate plan. An alternate executor is beneficial in case the executor is either unable to serve in the future or becomes unwilling to serve when the time comes to take on the role. Having a named alternate executor helps to ensure that the estate administration process continues without unnecessary delays. Having multiple prevents delays to the process if even the back-up plan fails.
When selecting an alternate executor, be sure to choose an individual who also fulfills the necessary qualities of being trustworthy, organized, and an effective communicator. If they must step into the role at any point, it’s crucial that they exhibit the same reliability as the initially appointed executor.
Navigate Estate Administration With RMO Lawyers
The probate process is complex, and it requires a skilled and organized individual to effectively follow it through while protecting the interests of an estate and its beneficiaries. It’s important to be mindful of one’s experience, financial acumen, and capacity when choosing an executor so that you can maintain confidence and peace of mind that your estate will be handled responsibly while securing your beneficiaries’ rightful inheritances.
If you have questions about the administration of a loved one’s estate, the estate and probate administration attorneys at RMO Lawyers can help. If you run into any potential disputes or concerns with a chosen executor, then the probate litigation attorneys at RMO may be able to support you in seeking a resolution sooner rather than later. With our decades of experience in estate administration, we’ll work to understand the unique needs of your case and bring you valuable peace of mind.
Schedule a consultation with our team at RMO Lawyers to discuss your case.
Glossary
Estate Administrator – An individual appointed by a probate court to manage and administer an estate when there is no will naming an executor, the named executor is deceased or otherwise cannot serve, including because they are disqualified or were suspended or removed.
Executor – An individual or institution appointed in a will to administer the decedent’s estate, ensuring that assets are distributed according to the terms of the will and applicable laws.
Personal Representative – An overarching term for a person who is responsible for administering an estate, encompassing the role of executors, administrators, and trustees.