“One of the most common misconceptions about executors is the extent of their power in administering an estate,” Alexander Bove, Jr. observes in The Complete Book of Wills, Estates and Trusts.
That story about the practically new Cadillac sold by the widow executrix for $50? (Her late husband had specified that the car was to be sold and the proceeds given to his mistress.) Not a true tale, Bove assures his readers.
“An executor’s job is to settle the estate and distribute the remaining assets according to the terms of the will and the best interests of the beneficiaries.” In fact, the executor’s powers are derived from the will itself, Bove explains.
At Geyer & Associates, we typically draft wills granting the executors all “statutory powers” granted by the state of Indiana. The idea is to allow the executor to function without going through layers of hassle and delay at each step, and to enter into any “necessary and advisable” actions.
Such statutory powers include:
- Employing the services of real estate agents, stockbrokers, or other specialists
- Lending or borrowing money on behalf of the estate
- Mortgaging or leasing property
- Making investments
- Continuing a business
It is well established for executors to be paid a fee, and that holds true even in cases where the person named as executor is a beneficiary of the estate. The fee should be approved by the court prior to payment. That executor’s fee is separate from any attorney fees. Whoever is named executor in the will must have their appointment approved by the court, regardless of that person’s experience or expertise. This court appointment activates the powers granted in the Will and gives the executor the authority to collect assets and administer the estate.
Under certain circumstances, Bove explains, it might be wise to consider a professional executor, such as an attorney or a bank, as opposed to a family member. What factors might make choosing an experienced professional a smart idea?
- The estate includes income-producing real estate
- The estate includes out-of-state property
- There is a closely-held business involved
- The estate is quite large and/or complex
- Disputes among family members are anticipated
At Geyer& Associates we take our clients unique goals and circumstances into account when drafting their estate planning so that the estate administration process is smoother and easier to accomplish.
We counsel and represent executors, personal representatives, beneficiaries and trustees. Often, i
helping our clients create their estate plans, we will recommend a “compromise plan” when it comes to selecting an executor for the will. Under such a plan, a family member is named to serve alongside a professional to carry out the terms of the will.
No, despite the myths, executors have no super powers. And while each estate situation is different, the goals are the same: To provide prompt resolution, minimize disputes, and carry out the wishes of the person who has died, all with the least possible stress for heirs.
