What An Executor Can Do and Cannot Do?

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“A person’s estate should be distributed to their heirs when they pass away. In most cases, this involves a lengthy process referred to as probate. An executor handles the tasks of getting the estate through probate and distributing the estate’s assets.”

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What An Executor Can Do and Cannot Do?

This post guides you about what an executor can and cannot do to protect the legacy of your loved one.

 

Bit About an Executor and What an Executor Do?

They are people designated in wills who handle the estate of those who have died. Your estate includes all your possessions, assets, and money.

The executor must carry out certain tasks as directed by state law. Once the court has approved them and given documents proving their authority over the estate.

Each state has different laws regarding executor responsibilities and the amount of time executors have to complete each task. Still, some basic principles apply across all of them. Executors are responsible for following the instructions in the will and acting in good faith.

He must first secure a deceased person’s estate. This may include finding the deceased’s assets, obtaining keys to the property, and ensuring anyone manages any business owned by the deceased. They must also inform the heirs of the probate process during this time.

 

Debt Management

He is also responsible for notifying creditors of probate early on in the process. In some states, this process involves sending letters to known creditors and publishing a notice in the local paper. In others, it is sufficient to publish the notice for some time.

 

Debt repayment

They can and must pay creditors before they can distribute assets. The letters of authority showing they are authorized to act on behalf of the estate give them access to bank accounts in the estate’s name.

The executor will file a tax return and pay all federal and state taxes due. Keeping a record of all payments made and keeping an accounting record for the court is essential. The estate funds must pay funeral expenses, back income taxes, and other debts before the property passes to the beneficiaries.

 

Asset management

Additionally, he must take inventory of all estate assets within the same period. These assets may include:

  • Accounts at a bank
  • Accounts for investments
  • Insurance for life
  • Accounts for retirement
  • Property management
  • Organizations
  • Amounts of salaries
  • Property of a personal nature

Executors can spend several hours creating an inventory for an estate that has a lot of items in addition to trying to determine the market value of those items.

In some states, he must complete the inventory by a certain deadline. The executor must determine which assets are probate assets and which belong to a beneficiary.

 

Estate distribution

They distribute the remaining assets following instructions of the will to heirs and beneficiaries, which may include transferring the title to real estate or other assets.

Among the executor’s responsibilities is to provide a detailed accounting of the estate’s income and payments and any other information that impacts the estate’s assets so that the probate court can approve the estate can pass.

Their job as executors ends once we have completed all the work. Once the court accepts this, their job as executor is complete.

 

Executors Can’t Do These Things.

However, executors keep their fiduciary responsibilities to heirs and beneficiaries even though they have extensive access to accounts, finances, and information. As a result, they should not treat estate contents as personal property and distribute estate assets in such a way as to ensure beneficiaries receive the best distribution possible.

 

Property sales in estates

Frequently, estate executors receive questions about their ability or inability to sell the property and if they can do so. An executor has no legal restrictions on selling assets from the estate during managing assets, so long as they are mindful of their fiduciary duties.

Hence, they must finance purchases from their pocket instead of using estate funds. They must also strive to always dispose of assets at fair market value.

A beneficiary’s interest is not the focus of the executor’s role beyond what they receive as a beneficiary. If an executor engages in self-dealing in an open probate case, it may lead to civil litigation. They will typically consider such actions illegally depriving heirs of their rightful inheritance.

Heirs contest probate proceedings commonly because the fair market value and property prices were not considered.

 

Will-changing

A probate court judge views a will as frozen in time when it was signed by the deceased. Therefore, when distributing assets and other estate property, he cannot alter it. In their role as personal representatives, the executor is responsible for carrying out the will’s conditions, and they are not permitted to modify these conditions.

 

Obtaining ownership of unclaimed inheritances

Family members may need to learn who all heirs are listed or where they live. He is responsible for finding each beneficiary listed in the legal document. As an executor is responsible for distributing an estate, it is natural that any unclaimed inheritance should go to them automatically.

As part of probate administration, an executor has to prove that they have done all they can to locate and locate the heir. They may also have to contact their friends or relatives if unsuccessful.

Executors may need to handle parts of the estate that cannot be distributed following the plan, even though these wills rarely come with such instructions. The court treats the intended beneficiary as deceased, and assets may pass following state laws.

Holding the remaining estate assets in the trust can also give the executor more time to locate the beneficiary. As a result, the executor never holds a priority over other heirs. And unless specifically provided in the will, they cannot decide how we distribute the unclaimed assets.

 

Executors are Capable of Independently Deciding.

An estate’s executors may be named in a will, in which case they must all work together in administering the estate and applying for probate together.

 

Executors are capable of independently deciding.

 

A person can renounce their role as a trustee, removing themselves from the role of executor. The remaining executors can apply for probate without them if one or more executors don’t want to act or are unable to act (for example, due to illness).

An unreserved executor(s) could also apply for probate using “power reserved” for the executor who cannot perform the duties of an executor. Deeds of Renunciation do not need to pass, and the remaining executor(s) will receive probate, while the other executors will still have the right to act if they wish.

If he wants to resign after the involvement in estate administration, he should consult a lawyer.

It’s quite common for executors to be beneficiaries. Consider that the living spouse is often named executor when one spouse dies. The same goes for children named beneficiaries and executors of wills.

 

Family Members or Friends Cannot be Executors?

They are often family members or family friends. Parents often name their spouses or children as executors, and children name their siblings or parents as executors. Sometimes, we can select the name of trusted family friends and executors of estates that grow in complexity.

Why? Depending on the circumstances, the estate principals may determine that the family friend has the most expertise in estate planning, is best suited to manage family dynamics or estate assets, and can handle the probate process if the parent passes away.

Parent’s estate, for instance, has a value of 3 million dollars. It comprises three real estate properties and a small company. Since the parent’s children work full-time and care for their own families. We can choose the family friend as executor. Even though the family friend is a retired accountant.

The parent is relieved that their estate is in good hands in such a case. At the same time, the children feel appreciated that one of them chose over the others. Without the need to spend the time required to guide their parent’s estate.

 

If the Beneficiaries of a Will cannot Locate or Find the Executor of that Will, What can They Do?

A local probate court will appoint someone as executor of an estate if the beneficiaries or heirs cannot locate the executor or if the executor dies. Executors are authorized to act on behalf of and in the estate’s best interests by the court’s “letters testamentary.” Those incapacitated, convicted of felonies, or express interests that conflict with the estate may not act.

 

What Happens When the Executor Finds the Beneficiary When They cannot Find the Person?

For a court to deem a beneficiary deceased from an executor because they are unable to locate them, the executor must demonstrate and document that the executor has done the following:

  • Intently trying to contact any spouses or relatives living in the same household as the beneficiary
  • To find the last known address for mailing
  • Contacted by former employers

Suppose he cannot locate the beneficiary within a set period. In that case, the probate court representatives must act as if the beneficiary has died and distribute their inheritance assets fairly to the remaining heirs and beneficiaries, according to the state probate code.

 

When a Will Says Someone Gets Something, can the Executor Decide they don’t?

They are responsible for carrying out the will’s wishes according to the will’s instructions. To pay bills or meet the will’s requirements, he can get permission to sell undesignated assets, such as dividing the remaining assets equally.

A beneficiary or heir who believes the executor has not acted following the will or not acting in the estate’s best interest can appeal with the probate court.

 

Is it possible for The Executor not to Serve?

In some cases, they are unable to serve. The following reasons may explain this:

  • Incapable or deceased
  • Felony conviction
  • Having a conflict of interest

When he cannot serve, the probate court will appoint someone else as a personal representative. Family members are usually the executors. The executor must act in the estate’s best interests by the letters of testamentary that the court issues.

 

What are the Chances of a Beneficiary Replacing the Executor?

A judge may remove him from office for failing to perform the office’s duties on the beneficiary’s part. A judge will likely remove an executor if:

  • Invest estate funds in waste, embezzlement, or mismanagement.
  • Ineligible to serve as executors.
  • Executors who neglect their duties or the estate.
  • Violations of any law that require removal may warrant removal.

The beneficiary must formally request to the probate court to depose him, accompanied by evidence of their inability to participate. In cases such as these, the petitioner has the burden of proof. It usually comes with a petition suggesting a replacement executor.

You can remove an estate executor before they take actions detrimental to the estate or its beneficiaries under California state law. Contact an experienced estate litigation attorney when you discover that the executor plans to take such action.

 

Have the Authority to Offer a House for Sale During Probate?

Executors can sell a home in probate if he is in charge of managing the estate. They may need to sell the property if he needs to raise cash for debts and obligations.

During the probate process, the executor must follow specific procedures to sell a house. For example, they can accept up to 90% of their appraised value.

 

Allowed to Sell the Property?

The sale of estate assets may also be subject to some restrictions for executors. If the estate account does not contain enough money to cover any debts, they can usually sell the estate property at fair market value to pay off any debts.

The executor cannot act on assets that need court approval before obtaining approval from the court, especially real estate.

 

Bottom Line

Caring for a deceased person’s assets and property is a challenging, stressful, and emotional experience. You must spend enormous work as an executor, especially when you need more time to complete the will’s provisions. To fulfill your fiduciary duties and follow the rules and regulations, you must seek the advice of a legal professional.

Hedy Ghavidel

HEDY GHAVIDEL Managing Attorney  Roseville Office  1-866-471-6981  info@attorneysre.com Bio...

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