An executor of a will has many powers. Among them are the following:
- Manage the estate assets including bank accounts, stock, bonds, retirement accounts, pensions
- Take inventory of assets, including personal and real property
- Invest assets
- Sell personal and real property
- Pay creditors and other claims including funeral expenses and any estate taxes that may be due out of estate assets
- Contact an employer to find out about the testator’s employee benefits
- Manage the testator’s business
- Make accountings to the beneficiaries and the court
- Communicate with the beneficiaries on a regular basis to keep them informed of important financial matters
- Resolve disputes that may arise between beneficiaries
- Wind up and settle the estate
- Distribute assets
- Close out the estate
An executor is named by the testator (the person who made the will) at the time a will is made and executed. The executor is has the power to carry out the wishes and intent of the testator and must do so by acting in good faith and by representing the best interests of the beneficiaries at all times during the probate administration of the estate and winding up and closing of an estate.
When choosing an executor, the testator should keep in mind qualities such as experience, ability to handle and manage business matters, competency and availability. The testator may appoint a spouse, another family member, friend, attorney or any other person over the age of 18 years of age to act as the executor. It is also common for a testator to appoint a co-executor or successor as well.
Examples of Power of an Executor
An executor has the power to initiate the filing of a probate proceeding with the Surrogate’s Court by filing the original will and death certificate with the court. He has the power to obtain and file any other necessary documentation that the court may require.
An executor has the power to enter into contractual and legal relationships, to an extent. For example, if the testator owned commercial property and had tenants, the executor has the power to may have to collect rent, work with a property management company or hire one depending on the size of the building and the number of tenants.
The executor has the power to work with attorneys and accountants in to make sure assets are properly valued and contractual obligations are completed.
An executor is entitled to receive compensation for his or her services in accordance with the law. The executor also has the power to NOT take compensation for their services, in order to not pay income tax on the compensation. When a spouse or a family member acts as executor, many times they do not take compensation for their services, especially when they are also a beneficiary receiving a distribution of assets under the will.
Fiduciary Duty of an Executor as a Limit on Their Power
Because an executor has so much power and discretion over the affairs of the estate, an executor is held a higher standard of behavior and is expected to act in an honest, fair and ethical manner. If an executor breaches their fiduciary duty, the executor could be held legally liable for any losses suffered by the estate or beneficiaries. An executor can be removed by the beneficiaries for breach of fiduciary duty and could be subject to restitution of any financial losses to the estate and beneficiaries, and even face criminal charges if the executor committed any crimes such as embezzlement of estate assets.
Acting an executor comes with power but is also a responsibility, especially if an estate is large and has substantial assets. That is why some spouses or family members decide they do not want to take on the job and end up resigning and hiring an attorney or another personal representative to replace them and administer the estate.
If you wish for a New York estate attorney to assist you with your powers as executor, call the Law Offices of Albert Goodwin at 718-509-9774.