The executor of an estate, whether the attorney or a trusted friend or family member of the deceased person, has a significant responsibility. He or she oversees the payment of estate taxes and debts, as well as the distribution of assets to estate beneficiaries.
These are the most common executor mistakes that can complicate the estate administration process.
Premature asset distribution
Legally, the executor must settle outstanding debts and taxes of the estate before distributing property. Some executors make the mistake of providing “at-risk” distributions of money or property to family members before paying estate bills. In this case, the executor would have legal liability for unpaid estate bills.
Premature bill payment
Paying estate debts too soon can also become an issue. For example, the executor may receive credit card bills in the mail in the deceased person’s name and pay them from estate funds. The law requires the executor to prioritize payments to take care of tax debt and funeral expenses first.
Lack of communication
The process of administering an estate can take time, often months rather than weeks. The executor has a fiduciary duty to the estate beneficiaries and must uphold this duty by keeping them informed. If a beneficiary has concerns about the executor, he or she may file an objection which will prolong the estate administration process.
The executor may also fail to communicate with potential creditors, which can result in legal challenges. He or she must post legal notice in a local newspaper in accordance with court instructions so creditors can make claims against the estate.
Choosing an executor who can properly manage the process can help facilitate smooth estate administration.