The responsibilities of being an Executor: Part 2
January 2018 | Joseph Bestreich, Esq.In part two of this article, we will continue with our discussion of important information that an Executor would need to know.
If you have been named an Executor of an estate and intend on serving as such, I advise that you either know most of this information or have a way of easily obtaining it.
I always suggest having an open and honest dialogue with the person nominating you as Executor. Some may feel uneasy talking about such an issue, but most will feel glad that they did once it is time to provide the necessary information in Surrogate’s Court.
Next, the Executor must access and manage the decedent’s property in a quick but substantive manner. It is also vitally important for the Executor to keep detailed records of all the assets that come into the Executor’s control.
The Executor has a duty to the beneficiaries of the estate to preserve as much value of the estate as possible by limiting expenditures. The Executor should expeditiously review bank statements to determine if there are any automatic deductions being taken from the decedent’s accounts.
Reviewing these accounts is also beneficial in determining any other institutions – such as insurance companies or a safe deposit box – where the decedent has additional assets.
A growing industry that requires more work for the Executor is digital assets. Online banks or vendors such as PayPal or Venmo manage online accounts for individuals and may have sizeable balances unbeknownst to loved ones.
If you are one of these people, it is highly recommended to have a list of your digital assets with passwords kept in a safe place, usually alongside your Last Will & Testament.
As these digital accounts and passwords change on a consistent basis, it is not advised to add these to your Last Will & Testament. If the prospect of keeping a list of all your passwords seems overwhelming or nerve-wracking, there are secure databases to load your usernames and passwords. However you decide is the best way to keep such a list, taking some steps to ease the burden of the Executor is sensible.
It is important to know that the Executor is not personally liable to any debts owed by the estate, unless he or she is a debtor as well. The Executor is responsible to pay from the estate any claims put in by a creditor.
Creditors have seven months from the time Letters Testamentary are issued to put in a claim against the estate. If they fail to do so within that time period, the estate is no longer liable for the distributions it makes to the beneficiaries.
Once any debts and/or taxes have been paid, assets can be distributed amongst the beneficiaries as stated in the Last Will & Testament. The Executor distributes the assets and receives a “Receipt and Release,” which is proof that the beneficiary received their share.
An informal accounting is typically done as proof of all the assets brought in and liabilities paid out is done by the Executor and then submitted to the Surrogate’s Court in order to close the estate.
The role of the Executor should be viewed as an honorable but daunting task. Many Executors receive the guidance of well-established attorneys to handle the intricacies of the role.
While not all estates require attorneys, if there are a number of contentious parties, having the support of an attorney may be in an Executor’s best interest. If you are planning to choose an Executor or someone is planning to appoint you as their Executor, it is crucial to know exactly what the role entails so that you are best equipped to take on such a task.
If you have been named an Executor of an estate and intend on serving as such, I advise that you either know most of this information or have a way of easily obtaining it.
I always suggest having an open and honest dialogue with the person nominating you as Executor. Some may feel uneasy talking about such an issue, but most will feel glad that they did once it is time to provide the necessary information in Surrogate’s Court.
Next, the Executor must access and manage the decedent’s property in a quick but substantive manner. It is also vitally important for the Executor to keep detailed records of all the assets that come into the Executor’s control.
The Executor has a duty to the beneficiaries of the estate to preserve as much value of the estate as possible by limiting expenditures. The Executor should expeditiously review bank statements to determine if there are any automatic deductions being taken from the decedent’s accounts.
Reviewing these accounts is also beneficial in determining any other institutions – such as insurance companies or a safe deposit box – where the decedent has additional assets.
A growing industry that requires more work for the Executor is digital assets. Online banks or vendors such as PayPal or Venmo manage online accounts for individuals and may have sizeable balances unbeknownst to loved ones.
If you are one of these people, it is highly recommended to have a list of your digital assets with passwords kept in a safe place, usually alongside your Last Will & Testament.
As these digital accounts and passwords change on a consistent basis, it is not advised to add these to your Last Will & Testament. If the prospect of keeping a list of all your passwords seems overwhelming or nerve-wracking, there are secure databases to load your usernames and passwords. However you decide is the best way to keep such a list, taking some steps to ease the burden of the Executor is sensible.
It is important to know that the Executor is not personally liable to any debts owed by the estate, unless he or she is a debtor as well. The Executor is responsible to pay from the estate any claims put in by a creditor.
Creditors have seven months from the time Letters Testamentary are issued to put in a claim against the estate. If they fail to do so within that time period, the estate is no longer liable for the distributions it makes to the beneficiaries.
Once any debts and/or taxes have been paid, assets can be distributed amongst the beneficiaries as stated in the Last Will & Testament. The Executor distributes the assets and receives a “Receipt and Release,” which is proof that the beneficiary received their share.
An informal accounting is typically done as proof of all the assets brought in and liabilities paid out is done by the Executor and then submitted to the Surrogate’s Court in order to close the estate.
The role of the Executor should be viewed as an honorable but daunting task. Many Executors receive the guidance of well-established attorneys to handle the intricacies of the role.
While not all estates require attorneys, if there are a number of contentious parties, having the support of an attorney may be in an Executor’s best interest. If you are planning to choose an Executor or someone is planning to appoint you as their Executor, it is crucial to know exactly what the role entails so that you are best equipped to take on such a task.