Executor Responsibilities to Beneficiaries

Executor responsibilities to beneficiaries include managing estate assets, paying off estate debts and distributing the remaining proceeds to the beneficiaries of the will.

As the manager of the estate, the executor carries a lot of responsibilities. Included here are the executor’s responsibilities to the beneficiaries. First, the executor has to get the will probated. Second, the executor must marshal all assets and make an inventory. Third, the executor must pay estate debts. Lastly, the executor must distribute the remaining estate assets to the beneficiaries. All of these are executor responsibilities to the beneficiaries because they have an impact on the beneficiaries share in the estate.

If you have issues with executor responsibilities to beneficiaries, we at the Law Offices of Albert Goodwin are here for you. You can send us an email at [email protected].

Get the will probated

The first on the list of executor responsibilities to the beneficiaries is to get the will probated. The will has to be probated because if it isn’t, the estate will be distributed in accordance with state intestacy laws. This will be detrimental to beneficiaries who are not entitled to inherit from the decedent under state intestacy laws or to those beneficiaries who, even if they are entitled to inherit intestate, would receive less if the will wasn’t probated.

For example, a beneficiary who is a friend of the decedent stands to inherit nothing if the will is not probated because a friend of the decedent is not a person entitled to inherit under New York intestacy laws (EPTL § 4-1.1). On the other hand, a daughter (out of five children) who was named remainder beneficiary of the estate may also stand to lose if the will was not probated because she would inherit more as a remainder beneficiary than under state intestate laws.

For these reasons, an executor has a responsibility to the decedent and to the beneficiaries that the will be probated. In addition, the executor cannot begin to act as such, unless and until the will is probated and the court has issued the executor letters testamentary. Given above, the first and foremost responsibility of an executor, upon the death of the decedent, is to get the will probated.

Marshal assets and make an inventory

The second executor responsibility to the beneficiaries is to marshal estate assets and make an inventory. The executor should ensure that all probate assets are accounted for. It is a responsibility to the beneficiaries because the higher the value of the estate, the higher the value of the beneficiary’s share.

In this respect, the executor must know that not all assets of the decedent pass through probate. For example, trust assets and assets held under a joint tenancy with rights of survivorship or tenancy by the entirety are considered non-probate assets. For those probate assets, however, the executor must ensure that he has possession and the estate has ownership over this property.

It is easy for an executor to gain possession of assets that are in the name of the decedent prior to death. For example, if a bank or brokerage account was in the sole name of the decedent, the executor can access it once he is issued letters testamentary. But what about those probate assets that the decedent allegedly “gifted” prior to his death?

In this case, the executor can use SCPA §§ 2103 and 2104 discovery and turn over proceedings to locate probate assets that are in the possession of third parties and to require its turn over to the executor or for the court to determine title and ownership over the alleged probate asset. Under SCPA § 2103, the executor, under knowledge or information and belief, can discover property held by third persons or can acquire knowledge or information from third persons about the disclosure of facts that would aid the executor in discovering probate assets. Under SCPA § 2104, the executor can petition the court to determine the title of ownership or right to possession of any property that the executor feels should be part of the probate estate.

For example, prior to your father’s death, he allegedly gave to his caregiver a Rothko painting worth $100,000 as a “gift.” Supposing that your father had two caregivers upon his death and you are unsure to whom the alleged gift was made, you, as an executor, can use SCPA § 2103 to petition the court to order both caregivers to disclose information about the Rothko painting to discover to whom it was allegedly given. Once the identity of the party holding the Rothko painting is determined, you can use SCPA § 2104 to petition the court to determine who among the two of you, the estate or the caregiver, has ownership or a better right to possession over the Rothko painting.

SCPA §§ 2103 and 2104 are normally used to question alleged gifts made by the decedent during his lifetime with an allegation that the decedent lacked the capacity to make the gift or was under undue influence making the gift.

Marshaling estate assets is an important executor responsibility to the beneficiaries because the remainder beneficiaries’ share increases when the value of estate assets increases.

Payment of estate debts

Simultaneous or after Marshaling estate assets and making an inventory of estate property, one the executor’s responsibilities to the beneficiaries is to pay estate debts. SCPA § 1811 provides the executor with the priority for the payment of debts and funeral expenses: payment of expenses of administration and funeral expenses

1. US and New York government claims
2. taxes
3. judgments and decrees against decedent
4. all recognizances, bonds, instruments, notes, bills, and unliquidated demands and accounts

The executor must strictly follow this priority. The executor should also not be unreasonably late in paying these debts (such as taxes) and expenses because penalties may be imposed (when it could have been avoided) which would result to a wasteful dissipation of estate assets.

On the other hand, the executor should also ensure that the claims made against the estate are valid and credible. To this extent, SCPA §§ 1802 and 1803 provide the executor with the procedure in verifying debt claims of creditors. First, the claim must be presented on or before the day fixed in the notice or if no notice is published, within 7 months from the date of issue of letters. Second, the claim must be made in writing and contain a statement of facts upon which it is based and the amount. Third, this claim may be required to be supported by an affidavit. Lastly, the notice of claim must be delivered to the fiduciary personally or by certified mail.

If the executor distributes proceeds to the beneficiaries without complying with the priority in the payment of estate debts and expenses, the executor may be held personally liable. For example, if you are the executor and you distributed estate assets to the beneficiaries without first paying taxes, you can be held personally liable for the payment of estate taxes.

On the other hand, if the executor pays an invalid claim, the executor may also be held personally liable. For example, the executor’s sister makes a claim against the estate that the decedent owed the executor’s sister $10,000. The executor pays his sister this claim. In the judicial settlement of account, a beneficiary objects to this payment on the ground that the sister’s claim has prescribed, such alleged loan having been made twenty years prior to the death of the decedent. In this case, if the court grants the objection, the executor may be held personally liable for the $10,000.

Given above, it is the executor’s responsibility to the beneficiaries to correctly pay estate expenses and debts. For valid and credible claims, payments must be made promptly in order not to incur additional penalties that could wastefully dissipate estate assets. On the other hand, it is also the duty of the executor to ensure that all debts paid are valid and credible in order to ensure the preservation of the estate assets. For this reason, correctly paying estate expenses and debts is an important executor responsibility to the beneficiary.

Distribution of estate assets to the beneficiaries

One of the last executor responsibilities to the beneficiaries is the distribution of estate assets to them. Generally, the estate must be open for seven months from the date of issuance of letters. This 7-month period corresponds to the 7-month period when creditors may present their claims under SCPA § 1802. The executor may not be held personally for any creditor claims made outside this 7-month period. Thus, after 7 months, beneficiaries should expect some, if not all, distributions to be made.

If you have been nominated executor and need guidance in executing your responsibilities or you are a beneficiary who hasn’t received the distribution from the estate, we have represented both types of parties in probate proceedings. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].

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