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Executor Duties – The Main Duties and Responsibilities of Executors

We all know that executor duties are wide and varied. Executors have a general duty to administer the deceased’s estate and to distribute the estate to the beneficiaries named under the deceased’s last will and testament or, in the absence of a last will, to the deceased’s heirs in accordance with state intestacy laws. In carrying out this duty, an executor is obliged to act promptly and in the best interests of both the estate and the deceased’s beneficiaries or heirs.

An executor will also have several other duties. Typical executor duties include the following:

• to take possession of the deceased’s property;

• to manage, protect and preserve the estate;

• to prepare an inventory of all the probatable assets and property owned by the deceased at the time of death. This inventory should be prepared within a specific time frame, usually three months. The inventory should list each item of property together with its market value at the date of death of the deceased, as well as set out details of any encumbrances registered against the asset in question. Where market valuations have been carried out, details of the valuation agent used should also be included;

• to publish a creditor’s notice in a newspaper circulating in the county in which probate is filed once a week for three successive weeks. The notice should stipulate that the deceased has died, provide details of your appointment as executor and state that creditors of the deceased’s estate can present details of any claims they might have against the estate for a period of three months following the date of first publication. Once this period of time expires, creditors will no longer be able to take a claim against the estate;

• to decide which creditors’ claims should be allowed and which should be disallowed; and

• to pay allowed creditors’ claims in the following order:

– funeral expenses;

– costs and expenses associated with the administration of the estate;

– federal debts and taxes owed by the estate;

– medical expenses associated with the final illness of the deceased;

– state debts and taxes owed by the estate; and

– all other claims.

How Can EstateBee Help You?

For more information on executor duties, read some of the other articles on executors, executor duties and probate on this website.

Alternatively, check out our book How to Probate an Estate – A Step-By-Step Guide for Executors. This book explores the probate process from the moment the deceased passes away right through to the distribution of the estate assets. Items such as death certificates, autopsies, applying for probate, funeral planning, administering an estate, and asset management are discussed at length. It will show you how to initiate and close probate with ease, learn how to locate and manage estate assets, deal with creditors’ claims, taxes, & trusts, avoid the common mistakes made by many executors, personal representatives & administrators, and much more….

If you have any questions or queries regarding our products or services, just contact our customer service team who would be delighted to assist you.

Can I Resign as an Executor Either Before or After Accepting the Role?

While you may have initially felt confident enough to take on the role of executor, you may subsequently discover that there is a lot more involved than you thought. You may even feel that the role is far too demanding both in terms of its time requirement and the strains caused by the complexity of the estate. You may even feel that you’ve taken on more than you can cope with and you want to resign as an executor.

The good news is that you don’t have to complete the job even where you have given your prior agreement and/or have been approved by the court. However, there will be some procedural requirements that you must first deal with before you resign as an executor. Given that you took on the role of executor, you cannot simply walk away of your own accord. As a matter of law, once you commence acting as executor, or ‘intermeddle’ in an estate as it’s also called, you are responsible for the administration of the estate. As such, if you wish to resign as an executor after taking control of the testator’s property, you must formally renounce your position in writing. In order to do this, you will need to submit a letter of renunciation in writing to the probate court, in which you resign as an executor. The precise form of this letter can vary from state to state. As such, you should check with your local probate office to see what precise form is required.

You will also have to provide the court with any information you have already gathered in relation to the deceased’s estate. This information will subsequently be passed on to the person who takes on the role of executor following your departure. If there was a second or alternate executor named in the will, this person will be asked to accept the role. If they are unwilling or unable to accept the role, the court will choose someone to act as executor in the same way as it would choose a person to act as an administrator if there was no will.

How Can EstateBee Help You?

For more information on executor duties and how to resign as an executor, read some of the other articles on executors, executor duties and probate on this website.

If you have any questions or queries regarding our products or services, just contact our customer service team who would be delighted to assist you.

How to Disinherit a Child in a Will – Disinheritance and No-Contest Clauses

In order to disinherit a child, or indeed a grandchild, the person making a will needs to expressly state this in their last will & testament. Once this statement is included in a will, the child or grandchild is effectively disinherited by not making any gift or bequest to them.

In order to further strengthen the disinheritance provisions, a no-contest clause should also be included in the will. This is simply a clause put in a will that states if any of the beneficiaries under the will challenge the gift left to them, they will receive nothing (or a nominal amount only) under the will.

A ‘no contest’ clause is designed to threaten to disinherit a child or potential beneficiary under a will if that beneficiary challenges the terms of the will in court. Where the beneficiary challenges the will, or any provision in it, the clause triggers a complete and total disinheritance of the beneficiary.

The Uniform Probate Code allows for no contest clauses so long as the person challenging the will doesn’t have probable cause to do so (where the last will has been fraudulently altered, for example).

One thing should be clear; if someone wishes to disinherit a child or a grandchild then the terms of their last will and testament should expressly state their intention to disinherit them. Also, if they have children born after making their will, then in order to disinherit them, it will be necessary for them to make a new will or add a codicil to your existing will. If you do not do so, you run the risk of having your last will successfully challenged.

How Can EstateBee Help You?

For more information on wills, check out some of our other articles on wills in our Learning Center.

If you would prefer a more in-depth understanding of wills and to learn how to make your own, check out our book How to Make a Last Will & Testament. “Make Your Own Last Will and Testament” includes a plain English review of the matters you need to consider when making a will, and includes all of the instructions and template forms necessary to make your own will. It will show you how to leave money and property to your loved ones, avoid intestacy, appoint guardians for your children, save on legal fees and probate, much more.

If you have any questions about our products or services, please contact our customer service team who would be delighted to assist you.

Contesting a Will – How to Contest a Last Will & Testament

Contesting a will, or a ‘will contest’, is a legal objection to terms of or the validity of a last will and testament. Contests to a will are usually initiated by family members or close relatives of the deceased. In most instances, the challenger feels that he or she has lost out on his or her rightful inheritance.

Typically, most last will contests are instituted by the spouse, children or, in some cases, grandchildren of the deceased. This is because they are generally the only class of beneficiary that have a legal or moral right to benefit from a deceased person’s estate. Contests to a will are likely to focus on one or more of the following assertions:

that the deceased lacked sufficient mental capacity to fully understand what he or she was doing in making his or her last will;
that the deceased was subjected to undue influence from a family member or adviser;
that the deceased’s last will has been fraudulently tampered with;
that the deceased’s last will has not been properly executed or witnessed in accordance with the law; or
that the challenger to the will has not been properly provided for under the terms of the will.

If the challenger is ultimately successful in contesting the will, the court will order a re-distribution of the deceased’s estate based on the determination of court or, where the will is deemed to be invalidly made, in accordance with the rules of intestacy.

Contests to a will are not very common. In fact, many last wills now contain “no-contest” clauses. A “no-contest” clause normally states that if a beneficiary under a last will & testament contests or challenges the will, then that challenger will get nothing under the will or else a token gift like $10. So, for this reason, it’s better to give a token give to someone in order to disinherit them, and include a no-contest clause, compared to simply not mentioning them in your will at all.

Contesting a will is not a straightforward process. So, it is recommended you speak to a lawyer if you are concerned about someone contesting your will or if you are thinking of contesting a will made by somebody else.

How Can EstateBee Help You?

For more information on wills, check out some of our other articles on wills in our Learning Center.

If you have any questions about our products or services, please contact our customer service team who would be delighted to assist you.

What You Need To Consider When Deciding How to Plan Your Estate?

Once you know exactly what you have to give away, you will need to look at the various estate planning options that are available to and suitable for you to plan your estate. Fortunately, estate planning is not as difficult or as complicated as it is often made out to be. In most cases, it simply involves a detailed consideration of your situation in life and how you would like your affairs managed if you become incapacitated or how you would want your assets distributed in the unfortunate event of your death. Once you understand the options available to you, you should be able to answer these questions a lot easier and use those answers to plan your estate. At that stage, you can use a number of devices and legal documents to put your estate plan in to effect.

Surprisingly, preparing the legal documents is often the easiest part of the process. The most difficult part for most people is actually deciding on what they want to include in their plan. This is because there are a variety of different issues to consider before finalizing your plan. At the very least, you must ask yourself (and elicit answers for) the following questions:

– what assets do I own and how much are they worth?
– how much debt do I have?
– whom do I want to give my assets to when I pass away?
– do I want to wait until I die before giving my assets away or would it be better if I did it sooner?
– who should I appoint to manage my assets if I am unable to do so due to ill health?
– who should I appoint to take care of my minor children if I become unable to care for them myself?- who should make medical decisions on my behalf if I become unable to do so?

Of course, there are many other questions that can and should be asked when deciding on how to plan your estate. However, for the moment the questions above are probably enough to get you started on your journey to preparing your estate plan.

How Can EstateBee Help You?

For more information on estate planning and how to plan your estate, read some of the other articles on this website.

You can also check out our book Estate Planning Essentials. It introduces you to estate planning and shows you how you can make an effective estate plan quickly and easily without the need for a lawyer. You’ll learn about estate planning devices such as wills, trusts, powers of attorney, medical directives, probate avoidance methods and more. To help you get a fuller understanding, particular attention is paid throughout to beneficiaries, children, disinheritance, incapacity, estate taxes and inheritance taxes. If you want to prepare an estate plan, this book is for you.

If you have any questions about our products or services, please contact our customer service team, who would be delighted to assist you.

Using a Codicil to Amend a Last Will

There are specific legal procedures for making changes to a last will and testament – including using a codicil to a Last Will. So if you want to make a change, don’t simply cross out the part you want to change and pencil in your revisions. Your changes are not likely to be honored, and you could end up invalidating the entire will.

To make a valid change to your last will & testament, you must either make a new will or add a “codicil,” which is an amendment to your will. This is a document that amends rather than replaces an existing last will. It requires the same formalities as to execution as does a last will & testament.

Again, it’s desirable that a witness to a codicil not be a beneficiary, as this precludes them from inheriting in some states.

Sometimes probate courts are faced with interpreting whether a testamentary document executed after the date of a last will & testament is intended as a new will, or merely as a codicil. If the document doesn’t entirely revoke the earlier will, and doesn’t completely dispose of the testator’s estate, the presumption is that the document is a codicil.

If there is room, a codicil is normally added to the original last will form immediately beneath the signatures. It’s worth mentioning that it must be typed, not handwritten, to avoid being struck down in certain states. If there is no room to add text after the signatures, it should be typed on a separate sheet of paper, and attached to the original will. In fact, it is often best to start a codicil on a separate sheet of paper – and we recommend this approach.

As with wills, codicil forms are available on the net for a reasonably small fee. Be sure to choose a good codicil kit prepared by a company with solid estate planning experience. A good kit gives examples of how the codicil should be constructed and the types of clauses used. Be sure to purchase your kit or codicil from a reputable vendor. Alternatively, you can have a lawyer prepare a codicil to will on your behalf.

How Can EstateBee Help You?

For more information on wills, check out some of our other articles on wills in our Learning Center.

If you would like to make a codicil, check out our Codicil to Last Will & Testament Kit. This self-help legal kit includes step-by-step instructions, detailed information and all the legal forms necessary to prepare your own document without the need or expense of engaging a lawyer. It also includes various examples of the changes that you might wish to make to your will.

If you would like to make a last will and testament, check out our Online Will Writing Software. It’s free to try and you can make a will in as little as 10 minutes. It’s also one of the leading estate planning softwares on the market.

If you have any questions about our products or services, please contact our customer service team who would be delighted to assist you.

Intestacy and What Happens If You Don’t Make a Will?

If you fail to make a last will and testament or if you draft an invalid one, you will be declared intestate after you die. If this happens, the intestacy laws of your state of residence will determine who gets what from your estate.

Your estate will go to probate and the court will appoint an administrator. An administrator is a legal term referring to a person appointed by a court to administer an intestate estate in accordance with the rules of intestacy. This person will settle debts; pay any necessary taxes and funeral expenses and distribute the remainder of your estate to your heirs in accordance with the state laws of intestate distribution. Sometimes the court will appoint a relative, but often, the administrator appointed to an intestate case can be a lawyer with little or no ties to the estate or to you.

The main purpose of intestate succession law is to allow for the distribution of the deceased’s estate in a manner that closely resembles how the average person would have written their will had they taken the time to do so or to do so correctly. While well intentioned, intestacy law in this respect is to a degree “guess work” and, as such, cannot always adequately reflect what you would have wanted. Most intestacy laws operate in a broad-brush fashion, and don’t deal with specific items.

For example, you may have always meant your son to have your antique desk and your daughter to have your antique wardrobe. However, you postpone making a last will because you’re only sixty-two. Then you collapse one day, and never wake up. There’s no will, so your administrator simply sells the house contents as a job lot to an estate furniture dealer, and pools the proceeds to be divided up later according to whatever intestacy rules apply. So it’s bye-bye desk, bye-bye wardrobe!

Making a valid last will is the best way to avoid the problems of intestacy.

How Can EstateBee Help You?

For more information on wills, check out some of our other articles on wills in our Learning Center.

If you have any questions about our products or services, please contact our customer service team who would be delighted to assist you.

Who Should I Choose as My Personal Representative of My Last Will?

Choosing a personal representative is one of the most fundamental elements of any last will. The main characteristics of a good personal representative are good common sense, excellent organizational skills, and integrity.

Some people choose to appoint their spouse, a sibling, or an adult child, while others prefer to nominate a professional (such as a lawyer or accountant). Alternatively, it can simply be a good friend. Whoever you choose should be both competent and trustworthy.

Other things being equal, it often will pay to choose a family member or friend as personal representative for the simple reason that these people expect little – if any – compensation, will respect your wishes, and are generally keen to process things and finalize them as soon as possible. However, keep in mind, the process can be quite administrative and time is often of the essence. You must choose someone who is organizationally reliable. It also makes sense to appoint someone who is living nearby as an executor so that they will be well placed to deal with the management, collection and distribution of the estate’s assets.

Your personal representative must be willing and prepared to carry out the sometimes wide-ranging, sometimes minimal, steps that may be required to finalize your estate. As such, you should always consult your choice of executor before you sign your will so as to be assured that your choice agrees to act as executor.

How Can EstateBee Help You?

For more information on personal representative duties, read some of the other articles on executors, executor duties and probate on this website.

For more information on executors and probating an estate, check out our book entitled How to Probate an Estate – A Step-By-Step Guide for Executors. It explores the process from the moment the deceased passes away right through to the distribution of assets. Items such as death certificates, autopsies, funeral planning and asset management are discussed at length. It will also show you how to initiate and close probate with ease, learn how to locate and manage estate assets, deal with creditors’ claims, taxes, and trusts, avoid the common mistakes made by many personal representatives and much more….

If you have any questions or queries regarding our products or services, just contact our customer service team who would be delighted to assist you.

Estate Taxes and Exemptions – Estate Planning Essentials

Estate taxes and exemptions are currently in place across 15 states at the start of 2016, the district of Columbia has levied estate tax, while six other states have opted for an inheritance tax with Maryland and New Jersey levying both taxes. The information below presents you with an overview of the each state collecting tax, the tax to be collected, the 2016 exemption and the top death tax rates of 2016.

Estate Taxes vs. Inheritance Taxes

Before proceeding with a discussion of estate taxes and exemptions, it is imperative that a distinguish between estate tax and inheritance is outlined. This distinction is important as states such as Maryland and New Jersey collect taxes for both the estate and inheritance.

Estate taxes are taxes charged against the estate in its entirety. This tax is independently charged regardless of those inheriting assets from the estate. Inheritance tax on the other hand, is the tax charged against the proportion of the estate inherited by the beneficiary based upon the relationship of the inheritor to the deceased. Different exemptions can apply based on the relationships between spouses, children or siblings and the deceased.

The map above shows Washington with the highest maximum estate tax rate at 20%. A total of 11 estates have a maximum tax rate of 16%. Six states have inheritance with Nebraska the highest rate of 18%, followed closely by Kentucky and New Jersey with a top rate of 16%.

Hawaii and Delaware have the highest exemption threshold at $5,430,000 (matching the federal exemption). District of Columbia and Massachusetts have opted for an exemption of $1,000,000 while New Jersey has the lowest estate exemption if just $675,000.

Of the six states with inheritance taxes, Nebraska has the highest top rate at 18 percent. Kentucky and New Jersey are close behind with top rates of 16 percent.

2016 will provide some estate taxes and exemptions changes for certain states, Tennessee has phased out its estate tax in its entirety. Maryland and New York on the other hand, have opted to increase their taxation exemption to match the federal exemption of $5,900,000 by the year 2019. Minnesota is in the process of doubling its exemption from $1 million to $2 million over five years.

State	Exemption	Rate% Min – Max
Connecticut	$2,000,000	7.2% – 12%
Delaware	$5,430,000	0.8% – 16%
Hawaii	$5,430,000	0.8% – 16%
Illinois	$4,000,000	0.8% – 16%
Maine	$2,000,000	8.0% – 12%
Maryland	$1,500,000	16%
Massachusetts	$1,000,000	0.8% – 16%
Minessota	$1,400,000	9.0% – 16%
New Jersey	$ 675,000	0.8% – 16%
New York	$2,062,500	3.06% – 16%
Oregon	$1,000,000	0.8% – 16%
Rhode Island	$1,500,000	0.8% – 16%
Tennessee	$5,000,000	5.5% – 9.5%
Vermont	$2,750,000	0.8% – 16%
Washington	$2,054,000	10% – 20%
District of Columbia	$1,000,000	0.8% – 16%

How Can We Help You?

For more information on estate taxes and exemptions, read some of the other articles on this website.

If you have any questions about our products or services, please contact our customer service team, who would be delighted to assist you.

Grantor Trusts and Non-Grantor Trusts: What’s the Difference?

Grantor Trusts and Non-Grantor Trusts
Grantor trusts and non-grantor trusts represent the two primary types of funded trusts or trusts that hold assets. Besides, the difference in name, these two types of trust differ significantly in both form and function, particularly when considering the tax implications of each particular type.

One may be surprised (and rightly so) to read that the main difference between grantor and non-grantor trusts does not lie in the fact that one has a grantor and the other does not. How these two classes of trusts are labeled can cause some confusion. For instance, despite the use of the terminology “non-grantor” this type of trust does have a grantor (the person creating the trust), in fact, all trusts have a grantor. Rather it is the type of powers the grantor can exercise over the trust that distinguishes the two types of trust.

Grantor Trusts
For grantor trusts, the trust agreement allows the grantor expanded powers over the business of trust administration. The grantor also exercises control over the property in the trust, primarily determining how the trust assets will be managed. Grantor trusts may also be structured as a partial grantor trust or a trust where more than one person is considered an owner of the trust.

Non-Grantor Trusts
A non-grantor trust, unlike a grantor trust, involves less control over the management of the trust and is irrevocable. Under this structure and the grantor relinquishes all dominion and control over the transferred assets. As a consequence of the grantor’s limited involvement in trust assets the IRS exposes this type of trust to less tax liability, whereby all income and capital gain realized by the grantor is taxable to the trust except to the extent income or capital gain is distributable to a beneficiary in which case the beneficiary is taxed on the distributable amount.

The Significance of the Grantor/Non-Grantor Distinction
From a functional standpoint, the grantor/non-grantor distinction alters how the trust operates, it is also important for tax purposes. As a rule, the IRS will look at the role of the grantor in a trust to determine the way in which a trust will be taxed. In cases where the grantor holds more authority over the trust, more tax liability will be imposed on the grantor. The reason for the policy is that the IRS presumes that if an individual can exercise control over assets in a trust, it assumed that the assets should be treated similarly to any other assets held in an investment account.

For the purposes of tax treatment, the IRS will examine the role of the grantor to determine if a trust is designated as a grantor trust or a non-grantor trust. The following list illustrates examples under which a trust would be designated as a grantor trust for income tax purposes:

1. a revisionary interest in the corpus of the trust

2. beneficial enjoyment of the corpus or subject to a power of disposition by the grantor without approval or consent

3. certain administrative powers exercisable by the grantor for the sole benefit of the grantor

4. powers exercised in a non-fiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity, including: and

5. being able to use income from the trust without the agreement of another.

As the list above displays, the IRS will expose assets that can be treated in a manner more akin to a non-trust account to a greater tax liability. In this sense, estate and financial planners whose goal is to reduce tax liability are wise to diminish the role of the grantor in trust management.

Revocable Grantor Trust and Irrevocable Grantor Trust
An additional variety of trust that falls into the class of grantor trusts is revocable and irrevocable trusts. The distinction between a revocable trust and an irrevocable trust rests in the grantor’s ability to revoke or amend the trust. Under a revocable trust, a grantor can dissolve the trust at any point during his or her life. Irrevocable trusts, on the other hand, cannot be altered or dissolved after its creation without the permission of the trustee and all of the beneficiaries. Understanding the difference between these two can be significant from the perspective of future tax liability. With an irrevocable grantor trust, the income from the trust falls on the grantor. However, trust assets are not included in the grantor’s estate for estate tax purposes.

Under a revocable trust arrangement, a grantor who retains a right to revoke, amend the trust with the approval of a party with a beneficial interest in the trust will not cause trust income to be taxed. However, granting power to manage and control trust assets to the grantor’s spouse or a non-beneficiary party will cause the grantor’s trust income to be taxed as if the grantor is the owner of the property.

How Can EstateBee Help You?

For more information on how to avoid probate, check out our book Make a Living Trust & Avoid Probate. It will guide you step-by-step through the matters you need to consider when making a living trust. You’ll learn all you need to know about living trusts, their advantages and disadvantages, the tax implications, the alternatives to living trusts and, of course, how to easily make your own. With detailed information, easy-to-follow instructions, helpful worksheets and all of the forms necessary, we show both individuals and couples how to avoid the otherwise inevitable delays and costs of probate by preparing a revocable living trust and using other simple probate avoidance strategies.

If you have already done your homework, and want to make a living trust now, you can jump straight to our Online Living Trust Software. You’ll be able to go through the entire process of making a living trust for free, and in less than 10 minutes. You only pay for your document if you wish to download it.

For more information on any of our products, contact our customer service team who are here to help you.

Archives: Articles

Executor Duties – The Main Duties and Responsibilities of Executors

Can I Resign as an Executor Either Before or After Accepting the Role?

How to Disinherit a Child in a Will – Disinheritance and No-Contest Clauses

Contesting a Will – How to Contest a Last Will & Testament

What You Need To Consider When Deciding How to Plan Your Estate?

Using a Codicil to Amend a Last Will

Intestacy and What Happens If You Don’t Make a Will?

Who Should I Choose as My Personal Representative of My Last Will?

Estate Taxes and Exemptions – Estate Planning Essentials

Grantor Trusts and Non-Grantor Trusts: What’s the Difference?

How Can EstateBee Help You?

Stay on top of the legal issues affecting your estate plan