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SELECTING AN ESTATE EXECUTOR OR SERVING AS ONE.

SELECTING AN ESTATE EXECUTOR OR SERVING AS ONE.

An executor of an estate is defined as an individual chosen to administer the estate of a deceased person. The executor's primary responsibility is to carry out the wishes of the deceased person based on instructions as spelled out in the will or trust documents.

The executor is typically named in the will. In instances where there was no prior appointment of an executor, the court will appoint a personal representative of the estate known as an administrator. As is the case with an executor, the administrator must follow a series of estate administration formalities.

Duties of an Executor

The duties of an executor may include, among other things:

  • probating the will, if necessary
  • making court appearances for the estate
  • notifying beneficiaries and heirs
  • publishing required notice of the estate administration
  • notifying creditors of the estate
  • determining the assets and liabilities of the estate
  • obtaining values as of date of death of the assets of the decedent
  • completing and filing a Pennsylvania estate inventory
  • maintaining property until the estate is settled
  • establishing an estate bank account, if appropriate
  • paying debts of the estate
  • handling claims against the estate
  • selling estate assets
  • preparing and filing the Pennsylvania inheritance tax return
  • preparing and filing the federal estate tax return, if applicable
  • preparing and filing the applicable income tax returns
  • properly distributing estate assets
  • formally closing the estate

Executor Compensation

Executors are entitled to payment for performing their duties.

When an executor chooses to get paid, the amount is based upon a series of factors including size and complications related to the administration of the estate and is often determined by state precedent and possibly by a probate court’s determination of what is reasonable under the circumstances.

Estate Expenses

Subject to the terms of the Last Will and Testament, most of the expenses incurred while settling an estate are paid for by the estate. Examples of these expenses include funeral and burial expenses, as well as paying persons hired to assist with the process, (e.g., attorneys, accountants, realtors, and appraisers.) In addition, necessary repairs to the property are usually an expenditure which the estate may be responsible for completing.

Ideal Character Traits in an Executor

The executor plays a critical role in the estate administration process. So how does one choose the “right” executor? Considering a person’s character traits can help with the decision.

Here are some traits that serve an executor well:

  • honesty
  • trustworthiness
  • financially astute
  • organized
  • conscientiousness
  • reliability
  • accessiblility
  • objectivity
  • attentiveness
  • patience

Honesty generally tops the list, given an executor’s status as a fiduciary. This term refers to a person or organization that acts on behalf of another person, putting that person’s interest ahead of their own.

Hourigan, Kluger & Quinn Attorney Joseph Kluger cautions that “The person chosen as executor can decline the position. In addition, Pennsylvania sets forth a number of scenarios under which people or corporations are not qualified to serve as executors, but generally, a person who has many of the traits set forth above and can work well with the accountants, realtors and lawyers should be an effective person to name as an executor.”

Improper Administration of an Estate

Whether it’s due to incompetence or misconduct, an executor’s failure to properly administer an estate can have severe repercussions for the beneficiaries. An executor has broad authority to control all aspects of an estate. When an executor acts improperly, the settlement of the estate can be delayed and the value of the estate diminished. Furthermore, if income and property taxes are not paid on time, interest and penalties can accumulate.

Fortunately, executors are subject to court oversight including accountings, time limitations, sanctions, and removal. Beneficiaries have rights, but they must act in a timely manner. Until action is taken, the estate’s losses can continue to grow.

If you have any issues or questions involving selecting an executor, serving as an executor, or the improper administration of the estate, call Hourigan, Kluger and Quinn at (800) 760-1529 to speak with one of our estate planning attorneys.

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