Should an executor consult with an estate lawyer?
On behalf of Scaringi Law posted in Estate Planning on Monday, February 8, 2016.
A recent article describing common mistakes made by executors of estates serves as an important reminder of why such individuals must be chosen wisely.
For starters, an executor must have a varied skill set. In addition to responding to paperwork and deadlines, he or she must understand the legal implications of the position. An executor has a fiduciary duty to the beneficiaries of the estate. If he or she breaches that duty, legal liability may attach.
For example, an executor should understand that there are classes of estate debt. Tax bills of the estate may need to be paid before other debts. If an executor erroneously paid other bills first and depleted the estate's money below the point of paying off the taxes, he or she could get sued. The same goes for the cost of probate; to the extent an estate plan required probate.
Of course, an individual may want to designate an executor who is a trusted friend or loved one, but not necessarily an attorney. This is understandable, as an executor may need diplomacy to navigate rocky family issues. Nevertheless, an executor can benefit from consulting with a law firm that focuses on estate planning and administration in order to avoid missteps.
In the same vein, an attorney can also help guide executors who may not have the financial background to make strategic investment or real estate decisions. A decedent's house may need to be sold to cover estate expenses, and the timing of that sale, as well as the details of its listing, can benefit from a professional's insights.
Source: Wall Street Journal, "The Biggest Mistake Executors Make," Veronica Dagher, Jan. 31, 2016