Being an executor is hard work. It’s a thankless job that most people take on because they love the person who left them in charge. That being said, it’s still important to do the job right, and there can be some fairly serious consequences if you don’t. Here are some areas where many executors get tripped up:
- Ignoring parts of the will that the beneficiaries don’t like. It’s not up to you, and it’s not up to the beneficiaries. If it’s in the will, you have to do it. The only way to get around it is to get a court order permitting you to do something else.
- Failure to communicate. This really is a mistake in just about every area of life, but gets particularly fraught in the area of estates. People want to know what’s going on. Even if nothing is happening for long stretches of time, tell the beneficiaries. There will be fewer fights if they know that you’re doing your job. Keeping secrets won’t help anyone, and could lead to a beneficiary suing simply because they don’t know what’s happening and have become suspicious.
- Treating the estate as your own bank account. Tip: it’s not. It has to be kept separate. Ultimately, beneficiaries can require a formal accounting that is approved by the courts, and if you have taken estate money, even if you have paid it back, you could be in trouble. You’ll be in even more trouble if you don’t pay it back. People have gone to jail for this. Don’t let that happen to you. If you’re not sure if it’s a proper estate expense, ask your lawyer. That’s what you’re paying (a proper estate expense) for.
- Paying beneficiaries before paying debts. Debts have to be paid first. This includes the funeral, and any debts that arose before death. Beneficiaries get whatever is left. If that’s nothing, then so be it. If you pay beneficiaries before paying debts, you will be personally liable for those debts.
- Trying to do everything too cheaply. Keeping costs low is one thing; trying to do everything without any help is another. Estate accounting is complicated; an accountant is an appropriate expense. So is a lawyer. So is a realtor, if there is a house to sell, especially if it’s in a city that you don’t live in. Professional expenses are almost always appropriate to pay out of the estate. Don’t skimp there.