December 16, 2018
What You Are In For as an Executor of a Will | Berry’s Bites
Taking on the role of an executor of a will or personal representative is a big responsibility. In Michigan you are looking at at least 5 months worth of work. You will owe an inventory and accounting as well as a fiduciary responsibility to your beneficiaries.https://www.youtube.com/embed/jXu8EMGmyxA
What You Are In For As An Executor of A Will: Transcript
Taking on the role of an executor or personal representative in a will is a big step. It’s a big responsibility for anyone who’s taking on that job. So basically, what they have to do is they have to wrap up the individual’s, the will maker’s, final affairs. They have to gather all the assets, make sure that we do an accounting, let all the beneficiaries know of the assets, provide them an accounting. And then from there, once that accounting is done, once that inventory is done where we’ve inventoried all the assets that need to be taken through this estate administration process, then they have to follow the terms of the will to disburse the assets to the beneficiaries.
It is a lot of responsibility because you owe a fiduciary duty to the other beneficiaries. I have to laugh when I see families fighting over who should serve as the personal representative or the executor because all you’re doing is taking on more responsibility. I would much rather just be a beneficiary relying on that personal representative or executor to do all the work while I can just sit there and say, “Hey, where’s my money?”
It is a lot of effort, a lot of work. The amount of time it takes depends on the state. For example, in the State of Michigan, to go through a probate process to administer a will, by statute it takes at least five months. It can take over a year. And it can create some interesting family dynamics, especially if you’re not communicating well with your beneficiaries, then it could lead to questions, and sometimes I’ve seen even lawsuits based on this. For example, a situation where dad had deeded a home to one of the kids, but then there was a will that said that everything should be split evenly. It caused some disagreements, and then it ended up going into court.
So understand, taking on the role of an executor or personal representative, it’s a big step. You’re taking on a lot of responsibility, and depending on the family dynamics, it can really kind of throw a monkey wrench into the family. Imagine, you have three kids. One of them is named as a personal representative. That maybe create some uneasy feelings amongst the other two siblings. And what I find a lot of times is that the issue isn’t what the will says or how mom or dad set out the estate plan but just the stress of the situation creates some of the old rivalries to come out between the siblings.
Understand the role of a personal representative, it is a big step. I think a lot of people don’t realize the emotional baggage that goes on along with serving that role. And then also just the amount of work that needs to be done. Depending on how organized the individual was, you have to account for all of these different assets. You have to have them valued, you have to make sure you’re following the proper tax rules, make sure that you handle the qualified accounts, the IRAs.
So one of the things that we do for our clients is we have a guide of the things that you need to do, we kind of call it a Family Succession Plan, to make sure that everything runs smoothly as you transition assets out of the deceased individuals’ names to the names of beneficiaries. I think understanding the process is one of the most important things and then communication. Communication is key. The more you communicate typically as that executor, the easier the process will be for the rest of the beneficiaries.
So those are some of the things to think about if you are going to be serving as an executor. First of all, make sure that you have the process down, and that’s where a lawyer can help you with that. There’s different guides that an assist you with that. Understand the emotional responsibility that you are taking on of dealing with a cool head during a somewhat stressful situation. Understands the length the process will take and the stress and frustration of having to deal with financial institutions. Then just communicate, communicate as much as possible.
Those are some of the things to think about as it relates to the role of an executor in a will or even a trustee of a trust. Hopefully, that was helpful.