Paper shuffling can enter your mind when you think about the estate planning process. While it is true that the execution of legally binding documents will be necessary, paper is just that. In the end, there is a human element. Someone must handle the business of your estate after you are gone. If you use a will, this person will be the executor.
Role of the Executor
Many people are not fully cognizant of the things that take place during the estate administration process. There is a misconception that people often harbor about the so-called “reading of the will.” They are under the impression that an executor reads a will to family members and other interested parties after someone passes away. Shortly after this reading, checks are written, and inheritances are distributed.
This is a depiction that you may have seen in a movie or on a television show, but in the real world, things do not proceed in this manner after someone passes away. Under the laws of the state of Florida, the executor (known as the personal representative) would be required to admit the will to probate. This is a legal process that takes place under the supervision of a court.
Why does the court enter the picture? Consider this hypothetical example. Let’s say that you are a fledgling venture capitalist. You have some money to invest, and you are willing to consider ideas that your friends present to you. Someone that you have known for a while wants to start a business, and you feel as though she has created a solid business plan. You decide to lend her $100,000.
Unfortunately, she passes away before the business actually starts to make any money. Her debt to you is not her only debt. She has credit cards with balances, she has tax responsibilities, and she has other outstanding debts.
If the executor could simply write checks right after the funeral, you and every other creditor could be left out in the cold. This is one of the reasons why there is a probate process. During probate, the executor is required to notify creditors so that valid outstanding debts can be paid out of assets that are contained in the estate. To facilitate this, the executor will start an estate bank account.
The executor must prepare the property for distribution to the heirs. All the property that comprises the estate must be identified and inventoried. Property appraisals and liquidation may be called for, and this can sometimes be quite time-consuming depending on the extent of the property in question.
Ultimately, when the estate has been probated and closed by the court, the executor can distribute the property to the heirs in accordance with the instructions that are recorded in the last will.
Choosing an Executor
The role of the executor is not an honorary, ceremonial one. As you can see from the description that we have provided so far, there are a lot of real world, business oriented tasks that must be completed. The executor has to have a good bit of business acumen, and the role can be time intensive. Since the executor will be handling money and property, there is a certain level of personal liability as well.
Though the executor is entitled to remuneration for his or her time and trouble, it is not necessarily going to be a responsibility that everyone will be willing to assume. You should certainly make sure that the person that you want to name as your executor is on board when you are devising your estate plan.
If you don’t know anyone who would be a suitable executor, or if you would simply prefer to engage a professional, you could establish a relationship with a trust company or the trust section of a bank. These corporate fiduciaries provide estate administration services, and you can go forward with total peace of mind if you have a professional standing at the ready.
Attend a Free Seminar
There are a lot of different facets to take into consideration when you are planning your estate, and as a layperson, you probably don’t know all the facts. We are well aware of this dynamic, and as a response, we make an ongoing effort to provide educational opportunities to people here in Southwest Florida.
Our firm offers free seminars on an ongoing basis, and you can learn a great deal if you join us for one of these sessions. There are a number of dates coming up in the near future, and you can visit our seminar schedule page to get all the details.