Learn the 4 R’s for Executor Success
You may have been named executor by some crazed relative. This relative, like Alice in Wonderland, lived in a world of their own making.
However, you don’t have to accept the job and the responsibility.
You have the option, before doing anything as executor, of renouncing. Think of it as declining the job offer.
You can renounce the job as long as you follow the necessary legal formalities. If you don’t renounce properly, you can be stuck with personal liability. That is because people will assume you were fulfilling your duties.
Executors: Be Safe, Not Sorry
But once you start acting as executor, you are personally obligated to complete your duties. You cannot avoid your duties or find someone else to perform them.
You may hire professional estate agents, such as legal, tax, and investment advisors. However, you cannot hand over your responsibilities, or let them make decisions about the estate.
A fine line exists between duties and administrative functions.
You may not have to personally move the furniture out of your aunt’s home. Such actions are not essential to your decision-making duties.
If you do hire anyone to help you, such as appraisers or stock brokers, you still must supervise their work.
Resign as Executor
Resigning is like quitting once you’ve started the job. You’ll need permission to walk off the job. Usually, valid reasons are health or safety problems that occur after you’ve started executor work.
To resign as an executor, you will need both the court’s approval and the beneficiaries’ consent.
If the beneficiaries object, you may need a court hearing to approve your financial dealings.
The court can reduce your fees if your resignation placed unnecessary financial burdens on the estate and beneficiaries.
You can see why it’s better to renounce than resign.
The Difference Between Renounce and Resign
You must understand the difference between renouncing and resigning as an executor.
Renouncing means you decline the role of executor. You can refuse for reasons of perceived risk, age, illness, or lack of time. You are released from any responsibility. You do not have to get permission from a judge to resign. You don’t have to go to court.
Executors can renounce by signing a form. Your lawyer files it with the court and notifies the people named in the will.
Make sure you use lawyers to renounce your executor duties. They will advise alternative executors or co-executors of your decision. You don’t want to accidentally assume executor liability by not notifying the proper persons.
Let’s look at Removed and Release, which are the final two R’s.
Executors Can Be Removed for Failures
Being removed as executor is a different legal procedure. Courts are reluctant to replace an executor unless serious questions arise about the executor’s conduct.
When courts remove executors, it is because there are serious allegations of misconduct. The interests of the beneficiaries require it. The process is time-consuming and expensive for those who lose the legal battle.
Conflict with the beneficiaries may be enough in some circumstances to cause removal.
How Releases Protect Executors
Release – the fourth R that executors must learn – is the most comforting.
When executors distribute the estate, you obtain formal written releases signed by all beneficiaries. The release confirms that your work as executor is complete. It also approves and authorizes payment of your compensation.
Usually, the executor obtains the releases from all beneficiaries before the final distribution of the estate.
Executors also obtain releases from creditors who may have claims against the estate.
The preparation of a release is legal work. For your protection, always use an experienced estate lawyer to prepare documents.Posted In: Executors On: May 6th, 2013