The role of an executor is one entrusted with the task of managing and administering the estate of a deceased individual, ensuring that their final wishes are carried out smoothly and efficiently. It is their responsibility to navigate through the intricate web of paperwork, financial matters, and legal complexities while shouldering the weight of grief.
In this blog post, we will dive into the essential roles and responsibilities of an executor, shedding light on their part in the probate process. If you’re just beginning your research on this topic, I’d recommend checking out the “What is An Executor Of An Estate Plan?” post where I walk through exactly what an executor is, how one is appointed, and other common questions defining an executor.
Hi, I’m Amanda Waltz, your local probate attorney in Northwest Ohio. With years of experience in the legal field, I have had the privilege of witnessing firsthand the impact that proper estate planning can have on individuals and their families. Today, as I run my own law firm, I am constantly reminded of the importance of empathy and understanding as I assist clients in making informed decisions about their estates. It is an honor to be entrusted with such personal matters, and I approach each case with the utmost respect and care. You can read more about me on the About page.
Whether you have been named as an executor or are considering whom to appoint, understanding the duties and expectations associated with this role is crucial. So let’s explore the world of executors and shed light on the steps they must take to ensure an efficient and lawful administration of the estate.
In This Post:
- How Much Power Does An Executor Have?
- What An Executor Cannot Do
- Is An Executor Financially Responsible?
- Can an executor be held personally liable for mistakes?
- How much does an executor get paid?
- Can an executor be removed?
- What happens if an executor doesn’t fulfill their duties?
- How long does it take to settle an estate?
How Much Power Does An Executor Have?
The powers of an Executor are typically listed specifically in the last will and testament. Generally, they have the authority to control real property and personal property, settle debts, and convert assets into cash to facilitate debt payment, unless a particular asset has been devised or bequeathed to a beneficiary. For example, if a car is designated for John Doe, it must be transferred to him if it remains in the estate at the time of the deceased’s death. The Executor is responsible for paying taxes and covering necessary repairs or improvements to preserve any real property. Furthermore, they ensure the collection, payment, and conversion of assets so that they can be distributed to the beneficiaries.
What An Executor Cannot Do
The executor does not have the ability to pay themselves or personally collect funds in their capacity as executor. Similarly, they cannot make payments to an attorney or other professional without obtaining prior approval from the court.
If court approval is required, notice must be sent to all beneficiaries, and their consent or approval is necessary to authorize fees or any other payments. While the executor can convert assets into cash, the funds are deposited into the estate’s bank account. Any payments made to individuals, including the executor themselves in some instances, must be approved by the court before they can be disbursed.
Decide who gets what
The executor has the responsibility to distribute the assets in accordance with the decedent’s last will and testament. They do not have the authority to determine the beneficiaries or their respective shares.
However, the executor does have leeway in deciding which assets should be sold and the pricing for such sales. For instance, when selling a house, the executor should aim for a fair market value by collaborating with a realtor, rather than selling it at a significantly lower price to a close acquaintance.
Nevertheless, they do have the authority to determine which assets are to be sold. It is essential for the executor to fulfill their duty of distributing the assets in accordance with the instructions outlined in the last will and testament.
The Role of an Estate Administrator
In cases where there is no appointed executor and an administrator is instead involved (see the definition if you need a reminder of the difference between executor and administrator), the distribution of assets is governed by specific laws. Those laws can be found in Section 2105.06 of Ohio’s statutory rules of descent and distribution.
For instance, if there is no surviving spouse, the assets would typically pass to the children. However, complications arise in situations where there is a surviving spouse, but one or more of the decedent’s children are not also the children of the surviving spouse. Matters can become more intricate when dealing with blended families.
Nevertheless, the administrator, who does not have the guidance of a will, is obligated to follow the guidelines set forth in the statute linked above.
Is An Executor Financially Responsible?
The executor of an estate is not personally financially responsible for the debts or liabilities resulting from the death of the decedent. It is the estate itself that assumes the financial responsibility, regardless of whether the executor is also a beneficiary.
In cases where there is no last will and testament, and an individual applies for and is appointed as the administrator of an estate, they will most likely be required to obtain a bond. The bond is obtained by paying a premium, usually a smaller amount based on the estate’s asset value. The bonding company then assumes the financial responsibility in the event that the administrator engages in asset misappropriation, ensuring that the beneficiaries can be made whole. It is worth noting that many last wills and testaments dispense with bonds, so the beneficiaries don’t have to pay the premium and undergo the associated background check process.
However, the executor can become personally financially liable if they engage in inappropriate actions involving the assets and funds of the estate. For instance, if the executor starts taking unauthorized payments for their personal use, such as sporadic amounts of $100, without obtaining court approval, they may be held financially responsible.
So, as I mentioned, the Executor or Administrator is typically not personally financially responsible for the debts of the estate resulting from the death. However, if the Executor or Administrator misuses the funds or does not pay debts in the correct order, they can be subject to legal action for misappropriation of funds or non-compliance with the laws of the state of Ohio.
Can an executor be held personally liable for mistakes?
Legal Rights of Creditors
Creditors may pursue legal action against the executor for improper debt payment. The issue primarily arises when the estate’s funds run out and certain creditors should have been paid prior to others. In such cases, creditors have the right to take legal action against the executor if they fail to handle the claims correctly or in the appropriate order.
Legal Rights of Beneficiaries
On the other hand, beneficiaries have the option to file a lawsuit against an executor who fails to follow their fiduciary duty. This can occur if the executor intentionally or sometimes even unintentionally distributes assets to beneficiaries too soon, makes improper investment choices without seeking professional guidance, fails to pay tax obligations, engages in conflicts of interest while selling assets, engages in self-dealing by selling items to loved ones at prices below fair market value, loses estate assets, or commits embezzlement. These actions represent breaches of the executor’s fiduciary duty and provide grounds for beneficiaries to take legal action against them.
It is important for the Executor or Administrator to adhere to their duties and responsibilities, ensuring proper management and distribution of the estate’s assets in accordance with the applicable laws.
How much does an executor get paid?
The fees for an executor or administrator, known as fiduciary fees, are determined by the laws of the state of Ohio. These fees are calculated as follows: 4% of the first $100,000 of personal property income and proceeds from the sale of real estate, 3% of the next $300,000, 2% of the remaining balance, and 1% of the value of real estate that is not sold. For dates of death after 2012, the fee is 1% of all property that is not subject to probate administration, except for joint and survivorship property.
The fiduciary/executor/administrator has the option to waive the fiduciary fees. It is common for them to waive the fees, especially if they are the sole beneficiary or if they are working together with a sibling to fulfill their duties.
Additionally, they have the ability to request additional fees for providing extraordinary services. If they have gone above and beyond their regular responsibilities or if they have dealt with exceptional circumstances, they can submit a separate form to request additional compensation for these extraordinary services.
Can an executor be removed?
Yes, an executor can be removed or choose to resign. If they wish to resign, they must file a written statement with the court after giving a minimum of fifteen days’ notice to the beneficiaries.
If there are grounds for removal, beneficiaries or interested parties can petition the court to have the executor removed and appoint a successor.
More information can be found in the Ohio Revised Code Section 2113.18: Removal of executor or administrator, and also in Section 2109.24: Resignation or removal of fiduciary.
What happens if an executor doesn’t fulfill their duties?
When an executor (or fiduciary, or administrator) doesn’t fulfill their duties, they can resign or be removed from the estate by the court. Then, the court will revoke all Letters of Authority for that person so they no longer have access to the assets nor do they have to fulfill those responsibilities.
How long does it take to settle an estate?
The settlement of an estate can range from six months to a year, depending on factors such as the size of the estate and the complexities involved. It could be slightly shorter or longer based on these considerations. Various factors can make it a lengthier process, such as having assets in multiple states or possessing rare collections that require evaluation. Additionally, if beneficiaries are scattered across the country, locating them can add to the timeline.
On the other hand, if the estate is relatively straightforward with designated beneficiaries or payable-on-death arrangements, the process may be expedited. The efficiency of the settlement also depends on the number of beneficiaries and their ability to cooperate. When beneficiaries are willing to sign notices, it eliminates the need for certified notices regarding the probate of the will.
Minimizing administrative tasks results in cost savings for the estate and expedites the probate court process.
The roles and responsibilities of an executor are multifaceted and crucial in ensuring a smooth transition of assets and honoring the wishes of the deceased. From managing the estate, handling financial matters, distributing assets, and resolving any potential disputes, the executor plays a pivotal role in the probate process.
If you find yourself in need of guidance or assistance in navigating the complexities of estate administration, it is highly recommended to seek the expertise of a qualified probate attorney in your area. They can provide invaluable support and legal advice to help you fulfill your duties as an executor with confidence and ease.
I am licensed in the state of Ohio and primarily serve the Northwest region. If I can be of assistance to you, please contact me here.
Do you still have unanswered questions after reading through these roles and responsibilities of an executor? You can connect with me on Instagram and Facebook, I love to hear more ways I can help in my community.