DO I HAVE TO SERVE AS EXECUTOR?

William Sweeney

After a relative or friend dies, you may be surprised to learn that you were chosen to be the executor of their estate. You might feel pleased to have a chance to do a final and important favor for someone you loved. On the other hand, you might feel you have little choice so that you have to accept the job. In fact, you do have a choice. Even if you feel an obligation to the deceased person -- who has both honored and burdened you by choosing you for the role of executor -- you can decline the job and let it pass to someone else.

To be nominated to be the executor of a Will imposes upon the person so appointed a fiduciary duty to adhere to the terms of the Will in conformity with California law. That duty can impose personality liability upon the executor should he or she fail to perform as required. And that liability can last decades...it can even be imposed after the death of the Executor

What is an "executor?" It is the person or entity nominated by the deceased person (the "testator") in a Will to administer the estate of that person as directed by the Will.

However, being nominated as an executor does not mean you have to accept the nomination. Know what you are getting yourself into ahead of time.

SKILLS YOU'LL NEED

The best executors are people who are careful, patient, unquestionably honest, well-organized, and committed to doing a good job. Executors must get along with people -- especially the other beneficiaries. They need a good bit of spare time, too. You can expect to spend many, many hours -- lasting six months to a year -- to do the job. You don't, however, need to be a financial wizard or legal expert. You can always get professional or personal help with your financial or legal tasks. You can hire professionals (accountants, tax preparers, lawyers, real estate brokers, and so on) who have the expertise you need. Their fees will be paid from estate funds, not your own pocket.

Every estate and every family situation is unique. The difficulty of serving as executor depends on many factors: the size of the estate, your state's laws, and the complexity of the deceased person's financial affairs, to name a few.

Complexity of the job. If the deceased person has left property of modest value, with a few major assets and no estate tax issues, accepting the executor's may not be such a big deal. Or, if you've already been helping manage someone's finances, handling things after death may be a natural extension of your duties. But, if you're unfamiliar with the person's affairs, you may face as many practical problems as legal ones: finding the will, untangling investments, digging up insurance policies, and the like. To determine if you can perform an executor's tasks consider the following primary responsibilities of the executor:

  • Probate the Will and get appointed by the court.
  • Obtain certified copies of death certificate.
  • Submit claim(s) for life insurance benefits if the estate is the beneficiary (get Form 712 from insurance company and consider mode of payment - lump sum, annuity, etc.).
  • Submit claim(s) for pension and profit-sharing plan benefits, if any.
  • Secure the decedent’s home and arrange for distribution/sale of personal property.
  • Inventory safe deposit box and close out decedent's bank accounts.
  • Notify creditors and close any existing credit accounts.
  • Open estate checking and savings accounts.
  • Account for all assets in the estate and file inventory of assets with the court.
  • Get date of death appraisals for all real property and securities.
  • Take care of any of decedent's unpaid medical and funeral expenses.
  • Verify and pay valid debts and expenses of the estate.
  • Obtain copies of all gift tax returns filed by decedent, if any.
  • File final Federal and State individual income tax returns for decedent by April 15 of the year following the year of death.
  • Arrange for ancillary probate administration for out-of-state real property, if any.
  • File Federal Estate Tax return (and possibly State forms) if the estate exceeds the allowable estate tax exclusion amount – return and taxes are due 9 months after date of death.
  • Pay the attorney, accountant, appraiser, etc., for their services.
  • File final accounting or informal family agreement.
  • Arrange for final distribution of assets and recording of court order affecting real property.
  • Record "Affidavit of Death of Joint Tenant" for any real property held in joint tenancy with right of survivorship titling. For property transferred to decedent’s children, arrange to file the Claim for Reassessment Exclusion for Parent-Child Transfer.

Note that many items on the above list will require the involvement of some outside professionals, such as a lawyer, accountant, appraiser, realtor, stockbroker, etc., and that this is not an exhaustive listing of all executor duties. More complicated estates involve many additional duties.

Personal factors. If you'll inherit most or all of the property, you have a strong incentive to serve as executor. You'll be in charge of what will shortly be your own property, and you won't have other beneficiaries to worry about. If you're one of several beneficiaries, however, it may be helpful to ask yourself some questions about the reality you will face.

  • If you live far away, will it be too difficult or expensive for you to handle the estate?
  • How likely are family members to let you do your job without second-guessing every decision?
  • How likely are other inheritors to bicker among themselves or with you? Would conflict be reduced or intensified if someone served as co-executor with you?
  • If you're worried about taking time away from work to perform your executor's duties, what payment will you be legally entitled to collect for your services?
  • Is there anyone else willing and able to do a conscientious job or, at least, share the work as a co-executor?
  • If the will names someone else to serve as a co-executor with you, do you think you'll work well together?

IF YOU DON'T SERVE, WHO WILL?

If you decline the job after the person who names you has died, or resign after serving for a while, someone else must take over. If you're an executor and you haven't yet begun probate, you should simply notify the alternate executor named in the will. If the deceased has named a back up to serve in place of you or a co-fiduciary to serve with you, then you will need to sign a document which states that you want to decline to serve and then either the backup or co-fiduciary will be able to serve.

An attorney's guidance will be needed to assure that the declination document is appropriate in your situation. If the deceased didn't name a backup or co-fiduciary, then in most cases a court procedure will be required to fill the vacant position. Most often, you will need an attorney to assist with the court procedure.

The bottom line is that you can decline to serve and go about your business. Of course, what you choose to do is entirely up to you, but your decision should be carefully considered based upon your unique family and financial situations and after consultation with a qualified probate attorney. If you need assistance or you want to determine which strategy is best for your situation please contact me. I assist clients in all Southern California counties, including Imperial County, Los Angeles County, Orange County, San Bernardino County and San Diego County. You can reach me by phone at 760-989-4820, by email at wksweeney@gmail.com or through my online contact form.