If a family member or friend has asked you to execute their estate for them upon their death, chances are that, like most people, you said, “of course” without really thinking about your duties. Understandable.
There’s also a chance that you could become a court-appointed executor if a loved one dies without naming an executor.
In either scenario, it’s a good idea to prepare ahead for the duties and liabilities involved in serving as an executor.
What Are the Duties of An Executor?
As an executor, you will use the written instructions of the deceased (typically expressed in a will) to faithfully distribute their assets. The American Bar Association (ABA) identifies these five action areas for executors:
Understanding The Will
Managing Estate Assets
Handling Debts and Expenses
Funding the Bequests
Trust Administration
Are Executors Personally Liable for Negligence or Wrongful Actions?
Yes! As you carry out your duties, it’s important to understand that executors are personally liable for the proper administration of the estate. In fact, many states require executors to post an “estate bond” prior to assuming their duties. Even if your state does not have this requirement, you will likely find an estate bond helpful, since claims could arise in the course of your service.
As AARP cautions executors, “You are personally liable for the proper administration of the estate. If you misrepresent the value of any assets, you could be held accountable by the IRS or by the beneficiaries. If you’re found to have shortchanged the heirs, you could be required to reimburse them out of your own pocket or pay fines.”
What Is an Estate Bond?
An estate bond protects the interests of the estate and its beneficiaries in accordance with state law, by compensating beneficiaries in the event of negligence or wrongful acts of the executor.
Colonial Surety offers a direct and digital way to obtain estate bonds, also known as probate bonds, personal representative bonds, administrator bonds, and executor bonds. The steps are easy — get a quote online, fill out your information, satisfy underwriting requirements, and enter your payment method. Print or e-file your bond from your home or office. Click here to obtain your bond.
Worth Knowing
If you have the good fortune and opportunity to do so, encourage family members and friends to be proactive about making wills—and being crystal clear about who keeps the various assets. Lack of clarity in planning can tear relationships apart later—and create stress and delays for executors too. NerdWallet offers some tips for getting estate planning started (Learn More).
In the event that you are involved in executing a will that is not clear, here are two scenarios to keep in mind.
Some assets may have specific related contracts that designate beneficiaries. For example, a retirement account might have a named beneficiary. Life insurance could be payable to a specific individual and so on. As an executor, you will review these details and manage the distribution of funds accordingly.
Otherwise, following state law, as an executor, you would request the court probating the will to conduct a determination of heirship proceeding. An outside lawyer would then be selected by the court to represent the unspecified heirs. Consequently, depending on the relevant statutes and familial facts, the court will indicate who should inherit the assets.