What are the duties of the

Executor of a deceased person’s Estate?

Typically, an executor must:

  • Find the deceased person’s assets and manage them until they are distributed to inheritors.
  • Decide whether or not probate court proceedings are needed.  Probate FAQ.)
  • Figure out who inherits property.
  • File the will (if any) in the local probate court. Finding and Filing the Will.
  • Handle day-to-day details.
  • Set up an estate bank account.
  • Use estate funds to pay continuing expenses.
  • Pay debts. Notice to Creditor of Death.
  • Pay taxes.
  • Supervise the distribution of the deceased person’s property. White & Williams  *   Nolo.com

 

Common pitfalls include …

self-dealing

buying assets for yourself or  a family member from the estate or trust, whether at market price,  American Bar Assoc

the duty of care,

requires a fiduciary to carefully manage trust or estate assets. “prudent investor rule,” which requires a fiduciary to use reasonable care, skill, and caution in managing assets. An executor or administrator is held to a “prudent man” standard, which is lower than a “prudent investor.” Assets must be sold at proper prices and on proper terms.

Duty of Impartiality

A fiduciary must not favor any beneficiary over another. the fiduciary must treat himself no better than any other beneficiary.  Lindlaw.com

NO, it’s too much.  How do I get out of this obligation?

A renunciation is a legal document that states the person named in the will as executor will not act as executor for the estate. Sign the renunciation form or petition and file it legal Zoom * Salvolaw.comLegal Zoom

Can a trustee resign?

Yes. If a trustee wants to resign, s/he can do so:

  • As explained in the trust document;
  • If the trust is revocable, by getting the person who has the power to revoke the trust to consent;
  • If the trust is irrevocable, by consulting with all adult beneficiaries; or
  • By getting a Court order after filing a petition asking the Court for permission to resign. 

Unless the beneficiaries say they do not want one, the trustee must file an accounting of all trust transactions while he or she was acting as trustee.  Santa Clara Court

 

What if the acting trustee dies or resigns or can no longer be the trustee?

If a trustee dies or resigns, is conserved or is declared “incompetent” by a court, or files for bankruptcy, then the trustee can no longer act as trustee and must be replaced.

Some trusts have two or more co-trustees and the trust may say that the remaining co-trustee will be the sole trustee, or may say how a new trustee will be appointed. 

If the vacancy cannot be filled, then a trust company may agree to serve if all adult beneficiaries agree. If that fails, any person who has a financial stake in the trust or any person named as trustee can file a petition to have a trustee appointed. 

Any beneficiary who is 14 years of age or older can nominate a trustee, even though a minor under the age of 18 is not legally qualified to serve as trustee.  Santa Clara Court

 

What if the responsibilities are too much for me?

Consider hiring an attorney, bookkeeper, accountant or corporate trustee to help you. (A corporate trustee can manage the investments and do the recordkeeping.) If you feel you cannot handle any of the responsibilities due to work, family demands or any other reason, you can resign and let the next successor trustee step in. If no other successor trustee has been named, or none is willing or able to serve, a corporate trustee can usually be named. * Estate Planning.com

 

Three Don’ts at a Trustee or Executor

When a loved one dies  AIG
Steps to settling an estate
Locating Important Papers

Brochure when a loved one dies

Robert Todd, Esq
How to make a will

5 comments on “Executor – What are the duties?

  1. How does an executor transfer title to a car that is being sold from the estate?

    How does he show that he has authority to sign the pink slip?

    • Here’s my research in Google:

      Complete a Transfer Without Probate Checklist

      Ownership of a vehicle may be transferred to the deceased owner’s heir 40 days after the owner’s death if the value of the deceased’s property in California does not exceed $150,000. The requirements are:

      The California Certificate of Title. The heir must sign the deceased registered owner’s name and countersign on Line 1. If the heir is to be the new owner, he/she completes and signs the back of the title.

      A Certificate of Transfer Without Probate (REG 5) https://www.dmv.ca.gov/portal/wcm/connect/e4aef797-a865-4481-ab31-586e8f6c7052/reg5.PDF?MOD=AJPERES&CVID=
      completed and signed by the heir.

      Odometer Disclosure Statement. If you have an older title or ownership certificate without an odometer certification box, or if the vehicle was sold more than once, complete a Vehicle/Vessel Transfer Form (REG 262). This form is not available on the Internet. To obtain a form by mail, call DMV’s automated phone service 24 hours a day, 7 days a week at 1-800-777-0133.

      A Transfer Fee.

      If the heir prefers to sell the vehicle, the buyer will need the items above and:

      A Bill of Sale from the heir to the buyer.

      A Transfer Fee. (Two transfer fees are due in this case.)

      Additional information on transferring a vehicle without probate.
      https://www.dmv.ca.gov/portal/dmv/?1dmy&urile=wcm:path:/dmv_content_en/dmv/pubs/brochures/howto/htvr2

      Copied from https://www.dmv.ca.gov/portal/dmv/detail/vr/checklists/probate

      CA Title

      • 2) the second most common way to transfer a vehicle after death is in a probate. In that case the Executor, or Administrator, of the estate will sign the pink slip (title paper) by actually signing the decedent’s name and then writing, “by ______ Executor.” The executor just writes their actual name in where the blank line is. The buyer can then register the car. Of course the money from the sale should go into the estate bank account. There is not a set DMV “form” for this as there is for transferring without probate. https://californiaprobate.info/2012/07/transferring-cars-after-death-in-california/

  2. Beware of administering estates.

    This is a lesson from a coaching session (continuing legal education) this morning. There is an IRS process for imposing estate liens. They apply at the time of death and continue for ten years for whatever liability, known or unknown, as existed at that time or might come to exist at any time during that ten years. It attaches by operation of law whether any notice is given or not, and whether there is any way to know or not.

    The limit of the tax liability is 100% of the highest value of the estate at any time from the date of death thru the date the assets of the estate are issued. It will attach to any accounts and property of the estate first, but if that’s gone, then it attaches personally to the administrator of the estate!

    Here’s how it could work. Suppose grandma dies with a home and rental property worth a million dollars and it’s long since been paid off. Suppose she paid it off with a series of bold financial moves, but she didn’t file her taxes, yet, on that and she owes a million dollars in taxes. But after she dies, no one finds any paperwork to clue anyone in, so the estate is processed based upon what is known.

    The heirs get the property, they sell the property, and everyone is happy.

    Except then the IRS shows up sometime later with their numbers. Maybe they’re right. Maybe they’re wrong. The Administrator has no way to know, so there’s no way to argue. The estate was resolved years ago. The property has already been sold. The IRS tells the Administrator that they are personally liable for the back taxes, plus penalties and interest. The Administrator, having done everything as right as could possibly have been known, is now on the hook for the full value of the estate or the full value of taxes owed, whichever is lower.

    If the heirs had not sold the property, at least, the IRS will attach the property. If the lien totals the value of the property or higher, they can force a sale or surrender. If one heir got property and another got cash, then the one with the real estate ends up taking the brunt of the whole lien.

    Lots of interesting consequences for being the responsible family member! Had I learned the material from today’s class beforehand, I would recommend that people be very careful about volunteering to be an administrator of an estate. You might be stepping up to be the responsible family member, and the other family members might totally trust you, but the IRS really doesn’t care, and they really don’t care if you knew or even had any way to know. When they decide they want their money, they will go after anyone they have to for it.

    I could not tell you how common the scenarios are that were covered in the class today, but both my brother and I have handled estates for the family – and while our family was completely reasonable – we ran into some legal complications both times. Had any of those involved the IRS, any of the nightmare scenarios in today’s class could have been ours!

    Incidentally, the instructor today is a current employee of the IRS who actually handles appeals on these kinds of things. So he is speaking from his personal experience about exactly how he sees these situations play out on a routine basis. The rules are the rules to minimize how people might try to game the system, but he admits that it sometimes sweeps up good people who really did try to do everything right.

    Given how huge this is and the fact that chances are high I may be appointed administrator of future estates, this meant something to me.

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