The Weekly Scenario: Concerns While Serving as Executor of Your Father’s Estate
Question: What should be my concerns in serving as Executor of my father’s estate?
Answer: In acting as Executor of your father’s estate, it will be important for you to manage your time demands of the probate process while allowing leeway for your own learning curve. As part of the probate process, there will be court documents and other filings to make. But first time executors should consider the following:
- Personal liability. Executors are held personally liable for their actions or inaction. Executors who are family members that choose to ‘go it alone’ are likely unfamiliar with the estate administration process, associated legalese, tax requirements, and more. An executor may be personally responsible for damages.
- Probate requirements. Not all assets are subject to probate, and some estates may be structured in ways that circumvent probate. Retirement accounts with proper beneficiary designations, assets held in trust, and property with certain titling pass immediately to beneficiaries and altogether avoid probate.
- Fiduciary income tax. Income accrued by the estate and the decedent’s living trust requires proper reporting on a fiduciary income tax return. In addition to this tax form, the decedent’s final income tax return is required. Depending on the assets involved in the estate, other tax reporting may be necessary (federal and state estate tax filings).
- Safeguarding estate assets. One of the executor’s duties is effectively preserving estate assets until distribution. The executor should consider unique assets (firearms, art, collectibles), out-of-state assets, property maintenance, and other factors that could complicate their efforts.
- Family conflict. Individuals commonly choose a trusted family member to serve as executor, which may cause conflict or stir past feuds. Long-time rifts could also prompt contest of the will and impose added strain on the executor’s time and resources. If an executor feels uncomfortable with the level of conflict posed by family members, they can elect to step down and transfer the duties to a neutral party, such as a probate attorney with no familial or other relation.
As always, if you have any questions or would like to learn more, please contact Steve Shane at firstname.lastname@example.org or .
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
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