FAQ - Duties of An Executor or Personal Representative
WHAT ARE THE DIFFERENCES BETWEEN AN EXECUTOR, PERSONAL REPRESENTATIVE, AND ADMINISTRATOR?
All these terms refer to the person a court appoints to administer an estate. When the law refers to a “person,” the term includes bank trust departments and other corporate fiduciaries.
Executor or executrix (the legal term for a female executor) is the traditional term for a person named in a will and subsequently approved by the probate court to administer and distribute the property of a person who has died with a will. We inherited this term from England. Personal representative is the modern term for “executor” and is without gender. Many states have adopted statutes that replace the term “executor” with the term “personal representative.”
An administrator or administratrix is the person appointed by a court to administer and distribute the property of a person who has died without a will (intestate).
For all but the most technical purposes, these terms can be used interchangeably.
IF I AM NAMED AS AN EXECUTOR, WHAT DO I HAVE TO DO WITH THE DECEDENT’S ASSETS?
As executor, you have the responsibility of gathering all the decedent’s assets and reporting to the court by preparing and submitting an inventory. You recommend and the court appoints an appraiser to value real estate and anything else that doesn’t have a readily ascertainable value. The due date of the completed inventory is governed by state law.
You must then take possession of the assets, usually for several months, in order for creditors’ claims to be filed and satisfied according to state law. After you have paid the decedent’s debts, claims, and taxes from the probate assets, you can distribute the remaining property to the decedent’s heirs as provided in the will. You then must prepare a final accounting and submit it to the probate court for approval.
AS ATTORNEYS, WHAT TECHNIQUES DO YOU USE TO DETERMINE A DECEDENT’S ASSETS?
If a decedent has a previously prepared schedule of assets, this job is much simpler. If there is no schedule of assets, we normally attempt to locate as many of the deceased’s financial documents as we possibly can, such as statements from financial institutions (e.g., bank accounts, brokerage accounts, IRA statements). We also attempt to locate deeds and mortgages, stock certificates, and life insurance policies in the decedent’s name. Federal and state tax returns can be helpful in ascertaining a decedent’s assets. We may also contact the decedent’s accountant and other attorneys, if possible, as they may have a clearer picture of the decedent’s estate.
I HAVE BEEN APPOINTED AS PERSONAL REPRESENTATIVE TO PROBATE THE ESTATE OF MY GREAT AUNT. WHAT ARE SOME OF THE MOST EASILY OVERLOOKED ASSETS?
Easily overlooked assets include:
*Income tax refunds.
*Overpayment of bills.
*Prepaid deposits (damage deposits for rental property or utility deposits).
*Collections (coins, stamps, etc.).
*Antiques whose values are not recognized because they are thought to be junk.
*Jewelry, precious gems, precious metals.
*Corporate share certificates.
*Time-share contracts for recreation properties in other states.
*Real property in other counties, states, or countries.
*Life insurance benefits and disability insurance benefits that are incidental to credit card accounts and savings accounts.
*Old life insurance policies for small amounts.
*Property entrusted by the decedent to someone else.
*Monies owed to the decedent under fixed obligations such as mortgages.
*Monies owed under obligations which are in dispute.
*Monies held by a state agency under an “escheat” statute if the decedent did not make deposits or withdrawals in bank accounts over a long period of time.
*Money lent to loved ones on oral agreements for repayment (the personal representative may have to go through many previous years of the decedent’s canceled checks to learn of such loans and to calculate the unpaid amounts owing at death.)
*Rights to reimbursements under medical insurance policies and long-term-care contracts.
WHAT SHOULD I DO WITH THE BANK BOOKS AND CHECKING ACCOUNTS?
Bank accounts which were in the decedent’s individual name will have to be secured. If necessary, an emergency motion for appointment of a temporary executor will have to be filed in the probate court so that the named fiduciary can obtain immediate authority to act on behalf of the decedent. Until a fiduciary is authorized to act on behalf of the decedent, the bank account—not generally accessible—will be vulnerable to abuse.
Banking institutions will not provide information to either the attorney or the named fiduciary until a formal appointment has been made.
WHAT ABOUT HOUSEHOLD FURNISHINGS?
Your attorney should be able to recommend a qualified appraiser who will perform a room-by-room appraisal of the household furnishings.
I HAVE A FUNDED LIVING TRUST BUT HAVE A $2500 ACCOUNT IN MY NAME. WILL PROBATE BE REQUIRED?
For small amounts of personal property that have not been funded into a living trust, your heirs might consider a voluntary administration, or small-estate or informal probate, which is allowed by statute in most states. A voluntary administration is not a formal probate; it is an informal probate for modest estates. To qualify, an estate must, as a rule, consist of only personal property valued under a specified statutory amount. If the estate qualifies, the voluntary administrator is not obligated to file a bond or to file an inventory or annual accounting.
If it appears that a voluntary administration will meet your intent and will save the fees and delay of a formal probate, your heirs should consider it.
WHAT SHOULD WE DO WITH OUR PARENTS’ HOME?
This question is commonly asked by surviving children. Often, in moderate-size estates, the home is the estate’s largest asset and should be immediately secured from vandalism.
If anyone continues to reside at the premises, you must ascertain that he or she is rightfully in possession. You should also contact the homeowner’s insurance company and make sure there is sufficient insurance on the residence to cover any liability or loss in case of a catastrophe such as a fire.
You should have the value of the home appraised, and the appraisers should also provide a room-by-room inventory and appraisal of the household furnishings and their fair market values that can be filed with the probate court.
I HAVE BEEN APPOINTED BY THE COURT AS THE PERSONAL REPRESENTATIVE OF MY MOTHER’S PROBATE ESTATE. HOW DO I TRANSFER HER REAL ESTATE?
You prepare a personal representative’s or executor’s deed from you as personal representative or executor to the designated heir.
HOW DO I SELL THE STOCKS AND BONDS AND MUTUAL FUNDS?
You can sell these assets through a stockbroker or directly through the company’s transfer agent. The broker or agent will ask for proof of your authority to act, which is confirmed by certified copies of your “letters testamentary” or order from the court.
WHO WILL HANDLE THE DISTRIBUTION OF OUT-OF-STATE PROPERTY TO MY HEIRS?
If you die with real property titled in your name and located in another state, your personal representative will have to arrange for an ancillary administration in the probate court of the county and state in which it is located in addition to the state of your residence. Out-of-state personal property such as bank accounts can usually be collected without opening an ancillary probate.
Certified copies of the will and other filings from your home state’s probate court are sent to a law firm in the other state so that the firm can complete the probate process under its state’s procedure. Your heirs can receive their property when this out-of-state proceeding is completed.
WHAT PROBLEMS WILL ARISE IF WE LEAVE PROPERTY IN DIFFERENT STATES?
Probate can be required in every jurisdiction in which you own real property. Your fiduciary will have to deal with different judicial systems over long distances and through attorneys licensed to practice in those jurisdictions.
Ancillary probate can be particularly frustrating in situations where low-valued property requires relatively high fees because of regional red tape.
I AM THE PERSONAL REPRESENTATIVE FOR THE ESTATE OF MY GRANDFATHER. MY SEARCH FOR ASSETS HAS DISCLOSED A $400,000 SAVINGS ACCOUNT HELD JOINTLY BY GRANDFATHER AND THE WOMAN WHO WAS ATTENDING TO HIS LIVING NEEDS. I’VE ASKED HER TO TURN OVER THE MONEY IN THIS ACCOUNT, BUT SHE REFUSES. I WANT TO SUE HER. WILL I WIN?
Whether you would win the lawsuit depends upon the answers to a number of questions:
*Does the law of your state raise a presumption that a nonspouse named as the surviving owner of a joint account holds that account as trustee for the estate of your grandfather?
*Does the law of your state raise the presumption that the joint account was intended only to permit lifetime withdrawals by the caretaker for the benefit of your grandfather and was not intended to give beneficial ownership to the caretaker upon your grandfather’s death?
*Was your grandfather competent when he created the joint account?*Did the caretaker assert undue influence over your grandfather to get him to create the joint account?
*When your grandfather created the joint account, did the caretaker orally assure him that after his death she would hold and apply the joint account as trustee for some other person or for some other purpose?
*Would such an oral trust agreement be enforceable under the law of your estate?
The attorney representing you as the personal representative of your grandfather’s estate will conduct a preliminary investigation and perform preliminary legal research to form an opinion on which you may act. You should not be surprised if your claim against the caretaker is settled for a fraction of the joint account.
To discuss your specific needs, call 1-614-760-1801