Is There A Checklist?

[Anon-e-Mouse]

Jurisdiction

California

An elderly family member in California has designated me to be the executor of her estate. I live thousands of miles away in a different state. I have no idea what the duties or responsibilities of an executor are and I've never done anything like that before. Is there a checklist or a class I can take in advance on-line or something else that can help me learn what I need to do to carry out her wishes and close out her affairs in an orderly manner when the time comes?

 

[army judge]

I have no idea what the duties or responsibilities of an executor are and I've never done anything like that before.

The fact that you reside THOUSANDS of miles away from your relative's domicile should be reason enough for you to politely decline her offer. Another reason to decline is that you admit to having no knowledge of what accepting her offer entails.


However, if you persist in saying yes, read this:

How Does One Become An "Executor?"

1. The Executor is normally nominated in the Will but it is the court who formally appoints the Executor after a noticed hearing.



2. If no Executor is nominated in the Will, the court appoints an "Administrator" who performs the same function, usually a relative.



3. Once appointed by the court, the Executor assumes the powers and fiduciary duties necessary to comply with both the terms of the Will and the legal requirements imposed by the State.



4. The Executor can resign by a specified process and another Executor be appointed by the Court. Normally, the Will will mention successor Executors in the event one or more do not want to serve or become incapable of serving. The fiduciary duty remains until discharged by the court.



5. More than one Executor can be appointed but each is jointly and severally liable to perform the requisite duties to the Estate-one must be sure that the other performs adequately.



6. No one can be forced to be an Executor. However once one is appointed, one remains an Executor until discharged by the court and the court will not discharge an Executor unless that will not harm the beneficiaries.



What Is Fiduciary Duty and Why Does it Last So Long?

1. The fiduciary duty is the highest duty known in law. It is the same duty of care and good faith that a parent has to a child, a doctor to a patient, a spouse to a spouse…and a lawyer to a client. It requires the highest degree of protective action to ensure that the recipient of that duty (the beneficiaries of the Will) are protected and strictly prohibits self dealing or dishonesty. Personal liability can be imposed upon an Executor for breach of fiduciary duty. See our article on fiduciary duty for a full explanation.



2. The statute of limitations to bring action against a fiduciary only runs from discovery of the "wrong doing" and in the case of minor beneficiaries, only begins to run from the time of their majority. Thus, if an Executor steals something in 1980, and it is discovered by the child in 1990, but the child attains eighteen years of age in 1993, the statue begins to run in 1993, thirteen years after the event! If the fiduciary hides the theft, the statue runs from when the victim knew or should have known, which can be decades later.



3. There are ways to cut short the term of the statue of limitations. By certain petitions and accountings filed with the court and approved by the court, most causes of action against a fiduciary are later barred minus fraud on the part of the fiduciary. A wise Executor will make sure such petitions are filed so that the liability period is not prolonged.



What are the Practical Duties of the Executor?

Once appointed, the Executor "runs" the estate much as a business person runs a business. The Executor makes sure all debts are paid, all taxes paid, all assets cared for, then distributes the remaining assets to the beneficiaries in accordance with law and the Will.

If legal action is brought against the estate, the Executor is in charge of defending. Further, if the Estate (or the testator) has a legal claim against a third party, the Executor is obligated to consider filing suit.

If the Executor contests a claim against the assets, there is a formal procedure for rejecting the claim and contesting it in court if necessary.

Other typical duties:

Locating all assets of the estate and caring for them.

Paying expenses necessary to maintain the assets.

Paying continuing expenses that are necessary to keep the assets secure such as mortgage payments, utility bills insurance.

Paying income taxes that may become due. Pay any other taxes rightfully due.

Handling day to day details such as terminating leases and other outstanding contracts, notifying banks and governmental agencies, etc.

Setting up the estate bank account and brokerage accounts as necessary to keep income flowing during the life of the estate.

Paying any estate taxes.

Locating heirs and keeping them advised of the progress of the estate. Filing requisite notices.

Supervising the distribution of the assets and filing the necessary petitions with the court.



How Does the Executor Know What To Do?

The Executor normally hires, at estate expense, the various professionals necessary to perform many of the above duties. These include accountants, property managers, insurance brokers, attorneys, etc. The estate is to pay the reasonable cost of these professionals and most Executors rely on them heavily.



Is the Executor Paid?

The courts allow reasonable compensation to the Executor, usually a small percentage of the assets in the Estate. The attorney is normally paid a smaller percentage unless there are extraordinary duties involved. Often when an Executor is also a beneficiary, they decline the fee since it is income taxable while the inheritance may not be taxable at all. Legal advice should be sought on this detail.



How Long does It Last?

Most Estates are open about a year since the various tasks of paying taxes, selling property, locating heirs, etc, often take that long. At the very least, one can expect six to nine months of time before the Estate can close and if there is litigation outstanding, the Estate can stay open for years. At times, when sizable assets need to be sold over time, Estates can stay open for decades.

Nowadays, with most Estates pouring their assets into Trusts, it is more common for the Estate to be terminated relatively quickly.

The duties of estate executors in California | Law Offices of Connie Yi, PC

Executor of a Will in California - The Legacy Lawyers

Understanding the Role and Responsibilities of an Executor

 

[Anon-e-Mouse]

Thank you for all the useful information you provided. I do appreciate that but it almost freaks me out even more.

There are 4 reasons I can think of that she wants me to be the executor. 1) I am her closest living relative in terms of family relations; 2) although I live near the Great Lakes which really is thousands of miles from California, all her other living relatives live on the East coast which is even further away; 3) I at least call and talk with her on the phone several times a week which is more than anyone else does; and 4) I am also her only living relative with a college education.

We are not a rich or highly educated family for the most part, myself included, but I want to do the best I can. Lest it sound like I am some kind of a gold digger, I have been telling her for years that she should spend whatever she has on what makes her happy and comfortable because she can't take it with her when she goes.

 

[army judge]

Thank you for all the useful information you provided. I do appreciate that but it almost freaks me out even more.

You're most welcome.

If you want to serve as her executor, it need not be difficult.

Why?


How Does the Executor Know What To Do?

The Executor normally hires, at estate expense, the various professionals necessary to perform many of the above duties. These include accountants, property managers, insurance brokers, attorneys, etc. The estate is to pay the reasonable cost of these professionals and most Executors rely on them heavily.


You can HIRE professionals to assist you.

You, as executor/executrix, are allowed to fund such assistance using estate funds to do so.

You need not be discouraged about the difficulty of the task, as everyday people administer the assets of their deceased relatives and/or friends, utilizing attorneys and CPAs to do the heavy lifting.

There are 4 reasons I can think of that she wants me to be the executor. 1) I am her closest living relative in terms of family relations; 2) although I live near the Great Lakes which really is thousands of miles from California, all her other living relatives live on the East coast which is even further away; 3) I at least call and talk with her on the phone several times a week which is more than anyone else does; and 4) I am also her only living relative with a college education.

You could suggest to her to task a trusted attorney as the executor, eliminating you in the process completely.

At least you can think about the job and the issues that might concern you.

You are always free to politely decline.

One final thought.

If most of the assets are already in a trust(s), the job will be much easier.

 

[adjusterjack]

In addition to the valuable information provided by Army Judge, the CA court website had a self-help section on Probate. Note that, depending on the size of the estate, it might qualify for simplified procedures.

Wills, Estates, and Probate - probate_selfhelp (ca.gov)

There is also a tab for forms and rules.

Should you become executor or representative of the estate, your expenses get reimbursed off the top before anybody else gets anything.

 

[Anon-e-Mouse]

Thank you to both of you. Just to continue this thread one round longer. Can someone explain the scope of "fiduciary responsibility?" Like (for example) she has a great deal of things she's been collecting over the years. She wants them all to go to museums and libraries and the like. I already had one frustrating experience with this. She sent me a bunch of framed artwork prints that she was sure were signed originals. She wanted them to go to an art museum but was having trouble getting any local art museums to agree to take them. So she sent them to me and asked me to place them in a "good art museum" for her. It didn't take long to discover that these are not originals - they are prints and there are thousands just like them. Museums definitely don't want them and their "value" is pretty much $0 unless you can get something for them at a garage sale.

She got really angry when I tried to tell her (gently) that art museums were not seeking this kind of donation at this time and insisted that they were extremely valuable and I just wasn't contacting the right places. So I wrapped them up and put them in a temp & humidity controlled storage locker (that I've been paying for ever since) and figured perhaps I'd try selling them at a garage sale after she passes. I've already paid over $1200 for their storage since she sent them to me.

My fear is that most of the things she has collected over the years are pretty much like this. She may think they are valuable and museums will be fighting over who gets them, but I'm guessing that few-or-none of them actually are that kind of "valuable." She is envisioning having her name on a nameplate in museums and libraries across the country because of her valuable donations to the arts, and frankly, I'm pretty sure that's not going to happen no matter how hard I try. What would be my "fiduciary responsibility" with respect to this sort of situation?

 

[adjusterjack]

What would be my "fiduciary responsibility" with respect to this sort of situation?

You would have to act in the best interests of the estate to the extent that it's reasonably possible.

Ideally, your relative should be making arrangements with a potential recipient to examine the collection and agree in advance to accept it upon her death.

If she doesn't do that and the will just says donate them to a museum, you make reasonable efforts (like you already did) and document the results. What you want to avoid is other relatives coming out of the woodwork and asking what did you do with her "valuable art collection." You'll want to be able to present documentation, maybe an itemized appraisal, showing that the collection was, indeed, worth nothing. The cost of the appraisal comes from the estate's money.

 

[Anon-e-Mouse]

Thank you. This is really helpful!

 

[zddoodah]

Is there a checklist

I'm sure you can google, but the executors basic jobs are as follows:

1. Identify and take possession and/or control of estate assets.
2. Identify estate debt.
3. Use liquid assets (and liquidate non-liquid assets to the extent necessary) to pay estate debt.
4. Distribute whatever's left over in accordance with the terms of the deceased's will or as otherwise ordered by the court.

or a class I can take

Never heard of such a thing, but I can't say for sure that no such thing exists.

Jurisdiction: California

Assuming this means your relative lives in California. While California is not one of the states that requires a non-resident executor to be represented by counsel, you would be a fool to try and do this without an attorney. When your relative dies, hire a probate attorney, and your attorney will guide you through what needs to be done.

There are 4 reasons I can think of that she wants me to be the executor. 1) I am her closest living relative in terms of family relations

The executor need not be a relative. She might want to consider a geographically closer friend for the job.