If you are in the process of creating your Will, be careful not to overlook the importance of the Executor you appoint because he/she will be responsible for overseeing the administration of your estate after you are gone. One of the most common estate planning mistakes people make is to appoint someone as the Executor of their estate without giving the matter due consideration. The Indianapolis estate planning lawyers at Frank & Kraft explain how to pick the right person for the administrator of your estate.
What Does an Executor Do?
The person you appoint as Executor in your Will is responsible for administering your estate. Usually, that entails overseeing the probate of your estate. Among the most important duties and responsibilities of an Executor are:
- Identifying and protecting the estate assets. The first thing any Executor must do is to locate all relevant estate planning documents which may include a Will, trust agreement, life insurance policies, and/or Letter of Instruction among others. These documents should provide information regarding the estate assets which must all be identified and secured at the beginning of the probate process.
- Notifying creditors and paying claims. All known creditors can be personally notified that probate is underway but for unknown creditors, the Executor must notify them via publication in a local newspaper. Creditors have a statutory period, depending on how they were notified, within which they must file a claim against the estate, or they lose the ability to do so. As the claims are submitted, the Executor needs to evaluate each claim filed and approve or deny the claim. Approved claims are paid out of the available estate assets. If there are insufficient assets to pay all claims, claims are paid according to the priority set by law. If there are insufficient liquid assets available to pay all claims, the Executor must decide which assets to sell to raise the need cash.
- Litigating any claims. Sometimes the probate of an estate proceeds without a hitch and with no sign of a dispute; however, disputes are far from uncommon during the probate of an estate. If a beneficiary or heir questions the validity of the Will submitted for probate a Will contest might be initiated. The Executor is required to defend the Will throughout the ensuing litigation. In addition, creditors whose claims were denied also have a right to appeal that denial directly to the court. Once again, the Executor must defend the decision to deny the claim.
- Calculating and paying taxes. Every estate is potentially subject to federal (and sometimes state) gift and estate taxes. The Executor is responsible for determining if the estate owes estate taxes and, if it does, the tax must be paid out of estate assets. An error in the calculations used on the estate tax return could be devastating to the overall probate of the estate.
- Distributing estate assets. The idea behind creating a Will is to ensure that the Testator’s estate assets are distributed according to his/her wishes after death. As such, there should be assets left over after all approved claims are paid, including any taxes owed. The Executor is responsible for preparing any legal documents necessary to effectuate the transfer of the remaining assets to the intended beneficiaries and/or heirs of the estate.
Appointing Your Executor
It may be tempting to appoint someone close to you, such as a spouse, sibling, or best friend, as your Executor because you know they care about you; however, caring about you doesn’t ensure that someone is capable and/or willing to properly administer your estate. Instead, ask yourself the following questions when considering someone to be your Executor:
- Will this person be grieving your loss? If so, can he/she get a handle on that grief sufficiently to act as Executor?
- Does the individual have a legal or financial background that might be beneficial during the probate process?
- Does this person have the time to devote to probating your estate?
- Does the person live too far away to be the Executor?
- Does your estate include real property that will require management during the probate of your estate? If so, you really need a local Executor.
- Is the proposed Executor good at conflict resolution?
- Will the appointment of this person spark conflict?
- Does the individual want to be your Executor? Never assume the answer to this question is yes.
Contact Indianapolis Estate Planning Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about picking your Executor, contact the experienced Indianapolis estate planning lawyers at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.