Frequently Asked Questions
I was just named independent executor of someone’s will. What do I need to know? You need to understand the importance of your job as independent executor and the duties and powers that you have as independent executor. You should ask an attorney about what is involved before agreeing to serve as independent executor.
I was told that I have “fiduciary duties” to the beneficiaries. What is a fiduciary duty and what does that mean for me? A fiduciary is a person having a legal duty to act primarily for the benefit of another. When you are acting as independent executor, you are acting primarily for the beneficiaries of the estate, and you have legal, fiduciary duties to act for their benefit in managing and administering the estate. The law requires a high standard of ethical and moral conduct of fiduciaries. There are many specific duties, some of what are imposed by statute, some by case law and some by the will itself. It is important that you understand these duties. Ask your attorney to explain the duties applicable to you.
Can I serve as independent executor without an attorney representing me? Probably not. Most courts will not allow a person to act in a fiduciary capacity without an attorney. Even if the court allows you to do so, it is a bad idea, since doing a bad job as independent executor can result in lots of liability.
I was appointed as independent executor at a probate hearing, but they said I had not qualified yet. What does that mean? Once the order appointing you independent executor is signed by the judge, you must then qualify as independent executor in order to receive Letters Testamentary. To qualify as independent executor and receive Letters Testamentary, you must take an oath and file the oath with the court. If a bond was required in the order admitting the will to probate and appointing you independent executor, you must also pay the bond premium and file the bond with the court. (Most wills waive the bond requirement for independent executors.) When you have taken the oath and paid and filed the bond (if one is required), then you are qualified and you may receive Letters Testamentary.
Now that I am qualified and have received Letters Testamentary, what do I do with these Letters Testamentary? Letters Testamentary are your proof that you are the person designated and authorized to act on behalf of the estate. You will need to present Letters Testamentary to persons holding the assets of the estate so that they know you are the representative for the estate and that you are entitled to take possession of the estate assets. Banks, brokerage firms, title companies and insurance companies are the types of entities that may request Letters Testamentary.
Since my siblings and I are the only beneficiaries of the estate, may I put the estate property in my bank account so that I can avoid opening another account solely for estate property? No. You have a duty to keep estate assets segregated from your personal assets. Therefore, you should never put estate property in your personal bank account and you should never commingle estate assets with you own personal assets. Even though you and your siblings are the only beneficiaries, you should play it safe and keep estate property separate. You should seek the assistance of an attorney if you have questions about this.
Can I use estate property to pay the decedent’s medical bills and funeral expenses? Typically, an independent executor may use estate funds to pay funeral expenses and expenses of last illness, and may even sell estate property in order to pay funeral costs and expenses of last illness. However, before paying bills, you should discuss this with your attorney.
Can I sell the real property that is in the estate? Generally, an independent executor may sell estate property (real or personal) if funds are needed to pay expenses of administration, funeral expenses, expenses of last illness, and to satisfy claims against the estate. If the real property is not being sold for one of these purposes, the independent executor must have express authority in the will (in other words, the will must specifically state that the independent executor has the power to sell estate property) in order for the independent to have authority to sell the property. Most well-drafted wills contain this power, but many wills do not, and this can be a trap for the unwary independent executor.
I was told I am required to file an Inventory, Appraisement and List of Claims. What is this and when do I need to file it? An Inventory, Appraisement and List of Claims is a document which lists the assets in the estate, the value of each asset as of the decedent’s date of death, and a list of all claims due and owing to the estate. The Inventory, Appraisement and List of Claims is often referred to simply as “the inventory.” The inventory must be filed within ninety days of your appointment as independent executor, unless the court grants an extension of time in which to file the inventory. If you need an extension of time to file the inventory, you must file a request with the court. The inventory has specific statutory requirements, and you should seek the assistance of an attorney in preparing and filing the inventory.
Am I required to publish or send notice of any kind to creditors of the estate? You are required to publish a notice to creditors in a newspaper printed in the county where the Letters Testamentary were issued. The notice must state that all persons having a claim against the estate being administered must present such claim or claims within a particular amount of time prescribed by law. This notice must be published one time and proof of the notice must be provided through an affidavit of the publisher. This notice to creditors must be filed with the court within one month after receiving Letters Testamentary. You also must give notice to all known secured creditors. This notice must be given within two months after receiving Letters Testamentary. You may, but are not required to give notice to unsecured creditors. Even though this notice is not required, it is sometimes a good idea. Because these notices to creditors have very specific requirements, you should seek the assistance of an attorney in preparing and sending these notices.
The court's order admitting the will to probate and appointing me as independent executor states that I must post and file a bond. How do I do this? First, you should contact an insurance company that writes bonds. You will need to fill out a bond application with the insurance company. When the application is approved, you must pay the premium and file the bond with the Court. If you have difficulty finding an insurance company that writes bonds or if you have difficulty obtaining approval for your bond, you should seek assistance. If a bond is required, it must be filed within twenty days of the date of the order granting Letters Testamentary. You will not qualify as independent executor until you pay the bond premium and file the bond, and Letters Testamentary will not be issued to you until the bond is filed. (Fortunately, most wills waive the bond requirement for independent executors. Even if the will does not waive the requirement, you may be able to get the court to waive the requirement. Ask your attorney about this.)
This estate exceeds the amount a person may transfer tax-free at death. Do I need to file a return with the IRS and/or with the state in this regard? What do I do if taxes are due and how will I know if taxes are due? If you believe that the estate exceeds the amount a person can pass tax-free at death (that amount depends on the year in which the decedent died), you should seek the assistance of a tax professional to advise you. Your attorney can help you with this. Generally, if the value of the assets in the estate exceed the amount a person can pass tax-free at death, the independent executor must prepare and file a federal estate tax return and a state inheritance tax return and, if taxes are due, pay the tax. This is a complicated process and you should seek the help of a tax professional to assist you with this.
What do I do when I am ready to distribute the estate property? When you are ready to distribute the estate assets, you should review the will again carefully and distribute the assets as directed in the Will. Again, your attorney can assist you with this process.
Being an independent executor is a necessary but largely thankless job. You should go into it with your eyes open. Contact The Karisch Law Firm, PLLC for more information.