When setting up your estate plan you will need to make a lot of decisions regarding what will happen to your assets after you are gone. One of the decisions that will have an immediate impact on how things are handled following your passing is naming an executor of your estate. This is the person (or firm) that is responsible for managing the assets of your estate. They will also be the ones to ensure all your assets are distributed to your heirs according to your wishes.
In this role, the executor has to perform many duties including getting all estate documents together, filing with probate court, notifying interested parties, and much more. Throughout this process, the executor has a fiduciary responsibility to act in the best interests of the estate and the heirs who will be inheriting it.
Overview of Fiduciary Responsibilities
When acting as an executor for an estate, one cannot put their own interests first. Instead, everything that is done for the estate must be done in a way that is best for the estate and the heirs. This includes things like notifying heirs as soon as possible, filing paperwork with the courts in a timely manner, and making sure that the estate is properly maintained until all assets are properly distributed to heirs.
One common example is when an executor is responsible for managing the financial assets of an estate. While the executor is often responsible for managing investments until they are distributed, that does not give them unlimited control over what to do with these assets. The executor cannot take these assets and invest them into their own company, for example. In order to avoid even the appearance of a violation of fiduciary responsibility, many executors will have a dedicated financial advisor manage these assets until they are distributed.
Another part of the fiduciary responsibilities of an executor is to make sure that the inheritance process moves along at a reasonable pace. This means working with probate courts (if necessary), filing the proper paperwork to transfer ownership of assets, and more. They will also need to settle the debts of an estate in a timely manner so that the remaining assets can be distrusted properly.
Choosing the Right Executor
There is no doubt that choosing the right executor is an essential part of estate planning. Taking the time to decide who you want to handle these important responsibilities is critical. You can choose someone you know and trust personally, or name an attorney or other professional to take on the tasks. Remember, you also need to make sure to name a successor in case the first choice is unable to perform in this role.
Albright & Lumpkin, PC
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