If you are drafting your will, a legal document every adult should have, the person you name as your executor will be accountable for a number of important tasks, even if your estate is small. This may include filing tax returns, keeping meticulous records and distributing assets to your beneficiaries.
At the same time, there are rules about what an executor cannot do. Read on to learn more.
What Is an Executor?
An executor (called a “personal representative” in Massachusetts) is a person you choose to administer your estate upon your death. When you have passed away, the executor named in the will—assuming they agreed to take on this role and can do so—presents your will to the court. The executor then asks the court to confirm their appointment and validate your will.
Each state has rules regarding who may or may not serve as an executor. Basic rules usually include that the executor must be of the age of majority (in most states, age 18) and of sound mind. In some states, the chosen person must not have a felony conviction. There can also be other state-specific rules to qualify as an executor.
Assuming these criteria are met, the executor may then begin to manage the estate’s affairs. The goal is to wrap up the estate in an orderly manner. Responsibilities may include, but are not limited to:
- Identifying what assets and property comprise the estate.
- Determining what debts need to be addressed.
- Honoring the wishes expressed by the decedent in their will.
- Filing any estate and income tax returns that are needed.
Appoint a Capable and Responsible Person
Serving as an executor is a serious undertaking. If you are preparing a will, it is important to choose a trustworthy person who is reliable, organized and will take their role seriously. It is also essential they are capable of handling the responsibilities, so their financial sophistication and ability to understand complex issues matter.
What an Executor Cannot (And Should Not) Do
In general, an executor may not engage in bad acts or abuse their role. For example, they cannot:
- Refuse to probate a will if they have agreed to take on this responsibility.
- Steal from the estate or mishandle estate property.
- Take money from bank accounts and use them for personal needs.
- Transfer property for less than market value.
- Give property to people not benefitted in the will.
- Pocket money they collect from rental properties that are part of the estate.
If the executor steals from the estate, a court can remove them from their position and deem them liable for the return of stolen funds. They can also be sued by the beneficiaries and face other legal consequences.
However, in most states, executors may receive a “commission,” or fee, for their services. In New York, for example, an executor collects commissions based on the estate’s value. If the estate is worth $100,000 or less, they are entitled to 5 percent. In Massachusetts, the commission is based on the time and difficulty of the work involved, not on a fixed percentage.
An executor may also be reimbursed for any reasonable and necessary expenses required to carry out their role, which usually requires some court oversight and approval. That’s why an executor must maintain good records of all expenditures and transactions, and make this information reasonably available to beneficiaries, the court and other parties with a vested interest in the estate.
There are some exceptions for the personal use of estate property by an executor, such as when a parent leaves a home to their child who is serving as executor.
Executors are expected to honor what is set forth in a will unless it is not feasible. They cannot arbitrarily refuse to carry out the wishes of the individual who appointed them to the role, refuse to acknowledge beneficiaries or refuse to wrap up an estate.
But if a will provides for something that is illegal, against public policy or impossible (i.e., gifting of funds that do not exist), an executor understandably cannot carry out the provisions.
There are many other things an executor cannot do, but because every estate and will are unique, it is best to speak with a qualified estate planning attorney in your local area. Our experienced estate planning team is ready to help you plan for your future. Reach out to us today to get started.