When you die, all of the assets and financial obligations that you leave behind are considered part of your estate. The executor of your estate is the person or institution (such as a bank) that will manage and distribute your assets upon your passing. If you put your assets into a trust, the individual or organization that takes care of the trust assets is called trustee. Both an executor and a trustee need to be reliable, financially responsible, and honest people if you want your estate to be distributed smoothly and fairly.
What Does An Executor Do?
In most cases, your estate will need to pass through probate. Probate is a court administered process during which a judge will oversee the distribution of your estate’s assets to creditors and beneficiaries. Your executor will need to take the time to effectively represent your estate during the probate process.
An executor’s other duties include:
- Collecting and making an inventory of the assets of your estate
- Protecting estate property
- Paying off the debts and taxes that your estate owes
- Representing your estate if it gets sued by a creditor
- Distributing the property of your estate to your heirs
Some of these duties can be very difficult to meet. If people owed you money or property upon your death, your executor will need to collect these debts – or hire someone else to do it. Another difficult task can be selling off certain assets to pay off your taxes or creditors.
With so much at stake, you must appoint a responsible individual to be your executor. If you don’t feel comfortable selecting a friend or family member, you can consider appointing a trustworthy Indiana probate lawyer to be your executor.
What Is the Executor’s Fiduciary Duty?
An executor is your fiduciary. Fiduciary duty is a term that describes someone’s legal obligation to act in your interests – even after your death. In the context of your estate, your interests are the directions written within your will (and its amendments).
Verbal promises or other written materials that do not meet the definition of a will are not legally binding on the executor. In fact, your executor may be unable to legally act on these non-legally binding promises. In fact, an angry beneficiary may sue your executor for breach of fiduciary duty if they deviate from the will. For this reason, you need to write a clear and unambiguous will with the help of a lawyer, and appoint a trusted person to execute that will to the letter.
What Choices Do I Have?
There are many different ways to organize your estate and who will be in charge of it upon your death. The two basic choices you have when it comes to an executor is whether it will be paid professional, or a person you know who will work free of charge:
- Paid executor – People choose a paid executor, such as a lawyer, to ensure that the person who is overseeing the estate does not have a personal stake in the outcome. This choice avoids burdening a friend or relative with the significant responsibilities and time commitment of being an executor. While using a paid executor lessens the likelihood of disputes or of treachery, it comes at a cost. It’s a good option if you have a large estate, or if you have many divided beneficiaries who may try to influence an executor who is a friend or family member.
- Unpaid Executor – When there is only a small chance that your beneficiaries will contest the way your estate is being distributed, and when your estate is not particularly large, it would be in your interest to avoid paying an executor. A family relative or friend may act as your executor and waive the usual executor fee. Most people, however, don’t have a friend or relative with the experience and expertise necessary to manage the entirety of an estate. But you may appoint two or more executors, each with their own focus, to oversee different aspects of your estate.
The choices you make now concerning your estate can have a huge impact on the lives of your loved ones. To ensure that your family does not get embroiled in bitter legal battles, and that your heard-earned legacy gets distributed the way you want, you should organize your estate with the assistance of an experienced Indianapolis estate lawyer. Wills and estate attorney Sean Hessler can help you today to make the right choices for your family’s future.