Serving as Executor or Trustee can be a difficult and sometimes thankless role if the Beneficiaries do not understand the significant responsibility that you have had bestowed upon you.
Communicate, Communicate, Communicate
One of the biggest complaints that Beneficiaries raise is lack of communication. Insufficient communication often leads to inappropriate expectations or assumptions on the part of the Beneficiaries which can quickly escalate into a full-blown dispute.
The best course of action is to communicate with the Beneficiaries early and often. Don’t be afraid to repeat yourself and don’t hide information because you are concerned that it might hurt someone’s feelings. However, do seek to convey information in a thoughtful and empathetic manner. If a Beneficiary has been disinherited or is inheriting less than they may have anticipated, it’s okay to acknowledge that you understand their disappointment. Many Beneficiaries may have formed some sort of assumption about the size and nature of your loved one’s estate which may be inaccurate. For example, there may be significantly less assets than anticipated or significantly more debts than anticipated.
We’ve seen estates where the Decedent had previously received a rather large inheritance or windfall, leading the Decedent’s Beneficiaries to assume there would be a large inheritance, only to discover that the Decedent had squandered most of the windfall or inheritance. In other estates, we’ve seen a Decedent who had the outward appearance of wealth, only for the family to discover that they were significantly in debt and had very little, if any, positive net financial worth.
Organization is Key
Estate Administration involves a significant amount of paperwork. It is critical that you stay organized. Maintain a calendar with all appointments and deadlines. Clear and organized record-keeping will also reduce the likelihood of estate disputes. From time to time during the Estate Administration process, you may be required to produce certain documents or receipts. Being able to produce them in a timely and organized manner will keep the Estate Administration advancing in an organized and efficient manner.
Follow the Law
This might sound obvious, but you’d be surprised how many Executors and Trustees don’t understand or follow their legal duties. The North Carolina General Statutes set forth specific rules regarding the Estate Administration process that govern:
- Properly determining the validity of the Decedent’s Will and/or Trust;
- Properly interpreting the terms of the Decedent’s Will and/or Trust;
- Various required Court filings and accountings;
- Properly notifying known and unknown creditors of the Estate;
- Properly settling claims of the Estate;
- Proper filing of applicable tax returns and payment of taxes owed;
- Proper notification to Beneficiaries or potential Beneficiaries of the Estate; and
- Priority of distributions of the Estate if there are not enough assets in the Estate to meet all distributions specified in the Will or Trust.
Remember, as Executor or Trustee you are personally liable for complying with the law—meaning that if you make a mistake, you could be held responsible by a Court to correct the error. If such error caused financial harm to the Estate, then you would need to reimburse the Estate from your personal savings to correct the error. Therefore, many Executors and Trustees hire a law firm to assist them with the Estate Administration process. By hiring a reputable law firm to assist you, you limit your liability exposure by shifting your liability to the law firm’s professional malpractice liability.
Take Care of Yourself
Remember, this is a marathon, not a sprint. Don’t expect to complete the Estate Administration overnight. In addition to grieving the loss of a loved one, chances are that you have other responsibilities such as family obligations, a job, etc. Again, hiring a law firm to assist you can help ease some of the administrative burden so you can get back to your day-to-day responsibilities.
Losing a loved one is hard. The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.