99% of us (or more) have never had the pleasure to serve as an Executor. But you just found out you have been named as Executor of an estate, so what are your obligations?
- Understand Your Role: Your job as Executor is a legal one where you must follow the law carefully. In a case where an individual has left a Will, you must carry out that individual’s wishes. If they did not leave a Will, you would be called an “Administrator” and have to distribute the estate based on what the laws say. In Pennsylvania and in many other states, we call that the laws of intestacy, and it dictates where the estate goes. Probably best to leave a Will!
- Get Help: You don’t have to do the job yourself and learn from scratch. Make sure to put a trusted team together, such as an Attorney, Financial Planner and CPA. Every estate will be different, so it’s best to start early with an Attorney who can help guide you on all matters related to the estate administration.
- Organize & Gather Information: Hopefully, the person who passed away thought about organizing their own affairs, and has made it easier for you. Other estates, gathering information can be difficult. One key is not to feel you need to do everything at once, or quickly. You can take time to sort through various paperwork, wait for mail to come where you can intercept account statements. The goal is to try to build an accurate picture of what will be part of the estate. For instance, a person died with a house, two bank accounts, a CD and a brokerage account. You’d want to see if you can get statements for the financial assets.
- Communication / Transparency: As Executor, you will get questions about the estate from the other beneficiaries. You do want to keep an open line of communication, but it’s best to work through your attorney before communicating with the heirs. Often times, heirs will expect their inheritance to be larger, and distributed faster. Beneficiaries do have rights, including seeing an accounting of the estate assets and transactions, as well as seeing a copy of the will. The more transparent you are, the smoother things should go. Having said that, always get advice from your attorney before communicating with third parties.
- Taxes, Creditors, Final Expenses: These are all of the items that need to be paid first prior to the beneficiaries getting their share. This is often why there’s a delay in getting the funds to the beneficiaries. For instance, with creditors, they have a year to come forward after the estate is advertised properly. You don’t want to distribute assets sooner than that, otherwise you put yourself at personal risk.
- Accounting / Distributions: When you have reached the time that the estate has cleared all obligations, you can begin to wind it down. You’ll have to work with your team to build or finalize an accounting that will be reviewed by all beneficiaries. After all beneficiaries have signed off on the agreed accounting, which is called a family settlement agreement, then distributions can commence and the estate administration generally completed. If the beneficiaries don’t all agree, or if there is another claim (i.e., a creditor), then the Executor may need the court to audit the estate and rule on the accounting. This is rare in Pennsylvania.
If you are an Executor now or will be in the future, the best thing you can do is get competent legal advice. Remember, each state has different laws—some states have easier probate systems than others, so make sure to contact an attorney in the state where the decedent resided. For Pennsylvania probate assistance, please contact our office at (215) 706-0200.