Last Updated on May 16, 2023 by Tresi Weeks
Estate planning can be complicated. The person you name as your executor will be accountable for a number of important tasks, even in managing the administration of a small estate. This may include filing tax returns, keeping meticulous records, and distributing assets to your beneficiaries. Find out more about an executor and how an estate planner can help with your probate and estate planning needs in this blog.
At the same time, there are rules about what the person in this role is not permitted to do.
What Is an Executor?
An executor is a person you choose to administer your estate upon your death. When you have passed away, the executor, assuming they agree to take on this role and can do so, presents your will to the court. The executor then asks the court to confirm their appointment.
Each state has rules regarding who may or may not serve in this role. Basic rules usually include that the executor must be of the age of majority (in most states, age 18) and of sound mind. In some states, the executor must not have a felony conviction. There can also be other state-specific rules to qualify as an executor. In Texas, probate and estate administration helps with the distribution of assets after a person dies.
Assuming these rules are met, the executor may then begin to manage the estate affairs. The goal is to wrap up the estate in an orderly manner. Their responsibilities may include:
- identifying what assets and property comprise an estate
- determining what debts may need to be addressed
- honoring the wishes expressed by the decedent in their will (to the extent possible)
- filing any estate tax returns that may be needed
- and much more.
Appoint a Capable and Responsible Person
Serving as an executor is a serious undertaking. If you are preparing a will, it is important to choose someone you know you can trust, who is reliable, and who will take their role seriously. It is also essential they are capable, so their financial sophistication and ability to understand complex issues matter.
As part of this decision-making process, you may consider the things they would be prohibited from doing as well.
What an Executor Cannot (And Should Not) Do
In general, an executor may not engage in bad acts or abuse their role. So, for example, they cannot refuse to probate a will if they agree to take on this responsibility. They also cannot steal from the estate or mishandle estate property.
An executor cannot take money from bank accounts and use them for personal needs, transfer property for less than market value, pocket money they are collecting from rental properties that are part of an estate, and much more. Absent unusual circumstances, this is considered stealing.
If they steal from an estate, a court can remove them from their position and deem them liable for the return of stolen funds. Those who abuse their role in such ways may find themselves being sued by beneficiaries and dealing with other legal worries.
However, in most states, executors are allowed to receive a “commission” or fee for their services. In New York, for example, an executor collects commissions based on the estate’s value. If the estate is worth $100,000 or less, they are entitled to 5 percent.
They may also be reimbursed for any reasonable and necessary expenses they need to take on in carrying out their role. They have to go about collecting these amounts appropriately, which usually requires some court oversight and approval.
In addition, there are some exceptions for use of estate property by an executor. In many situations, such as where a parent leaves a home to their child, that child is also serving as executor. An attorney who specializes in guardianship or alternatives may be required to step in here. A will typically provides that living in the house is permissible in such a situation. A will may also have additional language that permits certain “self-dealing” by an executor.
Executors are also expected to honor what is set forth in a will unless it is not feasible. So, they cannot arbitrarily refuse to carry out the wishes of the individual who had appointed them to the role, refuse to acknowledge beneficiaries, or refuse to wrap up an estate.
However, as with most things, there are exceptions. For example, suppose a will provides for something that is illegal, against public policy, or simply not possible (i.e., gifting of funds that do not exist). In that case, an executor understandably cannot carry out such provisions.
An executor cannot fail to maintain good records. In managing an estate for the benefit of others, they are supposed to keep records of all expenditures and transactions. They will also be expected to make this information reasonably available to beneficiaries, the court, and other parties with a vested interest in the estate.
There are many other examples of things an executor cannot do. Because every estate and will are unique, it is best to speak with your estate planning professional attorney or special needs planning attorney. They can help alleviate any concerns you may have about what an executor may or may not be able to do.
Reach out to our legal team of attorneys to learn more about estate planning or appointing an executor.