A New York resident who has been appointed as the executor under a will has a number of legal responsibilities when the testator dies. Along with those responsibilities, executors also face problems involving liability issues. .
Whenever people die and leave assets, those assets, whether intangible or tangible, become part of the decedent’s estate. Prior to allocating the assets according to the testator’s wishes, the executor is responsible to make sure the assets are securely kept. During this time, if any valuable assets are lost or stolen, the executor can be held liable. To avoid a lawsuit, it is a good idea for the executor to take inventory of all the decedent’s assets and then get them appraised and safety stored away until they are distributed to the designated heirs.
Sometime family members may pressure the executor into distributing the assets right away. However, the executor must first make sure there are enough assets to compensate any creditors. On the other hand, paying debts too quickly can cause problems, too. Lower-class creditor claims are not as important as other classes and paying them off can result in a breach of fiduciary duty, exposing the executor to become personally liable for unpaid debts. For example, if the executor satisfies small debts, there may not be enough funds to pay an unexpected tax bill. To avoid this pitfall, the executor should make sure all the proper tax forms are filed and all the taxes are fully paid before satisfying both large and small debts.
Executors who wish to avoid common mistakes and liability issues while managing a decedent’s estate may want to have the assistance of an estate administration attorney. In an effort to protect the client’s interest, the attorney could offer valuable advice to help avoid or settle any disputes between executors and heirs .
Source: Market Watch, “The biggest mistakes executors make” , Feb. 5, 2016