What Power Does an Executor Have?
Being asked to serve as an executor is a big compliment with potential pitfalls, advises the recent article “How to Prepare to Be an Executor of an Estate” from U.S. News & World Report. You are being asked because you are considered trustworthy and able to handle complex tasks. That’s flattering, of course, but there’s a lot to know before making a final decision about taking on the job.
An executor of an estate helps file paperwork, close accounts, distribute assets of the deceased, deal with probate and any court filings and navigate family dynamics. Some of the powers that an executor has include:
- Locating critical documents, like the will, any trusts, deeds, vehicle titles, etc.
- Obtaining death certificates.
- Hiring the attorney to handle the succession before the court.
- Filing the will in the appropriate Louisiana district court.
- Selling certain property of the deceased, including real estate and often the family home.
- Overseeing funeral arrangements and memorial services, if any.
- Creating an estate bank account, after obtaining an estate tax number (EIN).
- Notifying organizations, including Social Security, pension accounts, etc.
- Paying creditors.
- Distributing assets.
- Obtaining a tax ID number for the succession.
- Filing estate tax returns and final tax returns.
The Louisiana Code of Civil Procedure allows an executor a statutory fee of 2.5% of the succession, and possibly more if you petition the court. So you are not required to do all of this work for free. Many of my clients, however, waive this fee.
Also, in Louisiana the powers that an executor has may differ somewhat between an “executor” and an “independent executor”. If you were appointed as the “independent executor” in the will (or if not, all heirs agree that you should be an independent executor), then there are certain tasks that can be streamlined and will reduce overall attorney’s fees and court costs. For example, an executor that is not independent, barring consent from the other heirs, will have to obtain a judge’s approval to sell property of the succession (unless this authority is explictly expressed in the will). This process involves petitioning the judge and publishing in the newspaper that handles legal publications for the parish. This process can add to overall costs.
If you are asked to become the executor of an estate for a loved one, it’s a good idea to gather as much information as possible while the person is still living. It will be far easier to tackle the tasks, if you have been set up to succeed. Find out where their estate planning documents are and read the documents to make sure you understand them. If you don’t understand, ask, and keep asking until you do. Similarly, obtain information about all assets, including joint assets. Find out if there are any family members who may pose a challenge to the estate.
Today’s assets include digital assets. Ask for a complete list of the person’s online accounts, usernames and passwords. You will also need access to their devices: desktop computer, laptop, tablet, phone and smart watch. Discuss what they want to happen to each account and see if there is an option for you to become a co-owner of the account or a legacy contact.
Many opt to have an estate planning attorney manage some or all of these tasks, as they can be very overwhelming. Frankly, it’s hard to administer an estate at the same time you’re grieving the loss of a loved one.
As executor, you are a fiduciary, meaning you’re legally required to put the deceased’s interests and the interests of all the heirs above your own. This includes managing the estate’s assets. If the person owned a home, you would need to secure the property, pay the mortgage and/or property taxes and maintain the property until it is sold or transferred to an heir. Financial accounts need to be managed, including investment accounts.
The amount of time this process will take, depends on the complexity and size of the estate. Many estates take six to twelve months to complete all of the administrative work. It is a big commitment and can feel like a second job. However, in certain cases, I can have the succession completed in as little as 2-3 months through a process I call an “open and close” succession. These successions are typically less expensive to my clients than a succession that must be administered over many months. It just depends on the what work has to be done.
Keep in mind that in Louisiana convicted felons are never permitted to serve an executor, regardless of what the will says. A sole executor must be a U.S. citizen, although a non-citizen can be a co-executor, if the other co-executor is a citizen.
Be very thorough and careful in documenting every decision made as the executor to protect yourself from any future challenges. This is one job where trying to do it on your own could have long-term effects on your relationship with the family and financial liability, so take it seriously. If it’s too much, an estate planning attorney can help.
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
If you liked this article, “What Power Does an Executor Have?” read these additional articles: Should I Use a Corporate Trustee? and What Happens If a Trust Is Invalid? and What a Will Can and Cannot Do and Can a Nasal Spray Prevent Dementia?
Reference: U.S. News & World Report (Dec. 22, 2021) “How to Prepare to Be an Executor of an Estate”