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Executor's Responsibilities to Beneficiaries

The executor of a will has a fiduciary duty to act in the best interest of the estate. This means that the law prevents you from acting in your own interest to the detriment of the estate. As an extension of this duty, executors also have several responsibilities to the beneficiaries of the will. The most notable responsibilities among these are the notification of inheritance and timely management of the estate. If you have estate planning questions, consider speaking with a financial advisor.

Notification and Right to Information

An executor’s biggest responsibility to beneficiaries is to notify them that they are, in fact, beneficiaries. Beneficiaries have the right to know they’ve been included in a will early on in the probate process. That way, they have a chance to contest anything they have an issue with.

Different states and counties have different requirements regarding the method of giving notice. To be safe, it’s a good idea to send beneficiaries a document stating their place in the will. This way, each beneficiary will have the notice in writing, and there can be no ambiguity that you’ve delivered the notice.

In addition to formal notification, the beneficiary also has a right to information about the estate and the probate process. This includes what assets are in the estate, how much debt the estate has and how the executor plans to pay that debt.

This doesn’t necessarily mean you need to provide beneficiaries with detailed balance sheets or dollar amounts down to the cent. You may not even have that information until you finish doing inventory on the estate. This means is that if beneficiaries have questions about what’s in the estate, or your plan to pay off any debts, you owe them an answer. As executor, it’s a good idea to keep everyone abreast of the process as it proceeds.

Timely Distribution

Executor's Responsibilities to Beneficiaries

Another responsibility the executor has is to distribute assets to the beneficiaries in a timely manner. Different states have different interpretations on what constitutes “a timely manner.” Some states don’t put any time frame in writing, while others stipulate one year as the deadline.

This isn’t to rush an executor such that he or she doesn’t do a thorough job. It’s in place to prevent any executors from filing the will in probate court and then doing nothing and letting the estate just sit in limbo. Additionally, there are a handful of expenses that come with the probate process, including taxes. So it’s in everyone’s best interests to distribute assets in a timely manner to avoid losing money to these expenses.

What an Executor Doesn’t Have to Do

While an executor is obligated to notify beneficiaries and then move things along at a reasonable pace, he or she isn’t required to distribute inheritances at the time of notification. In fact, beneficiaries might not receive anything until several months after they’ve been notified of their place in the will. Before assets can go to their heirs, for instance, the executor will need to settle any of the estate’s debts. Because creditors need time to make claims against the estate, this can last for a bit.

Executors are also under no obligation to include beneficiaries in the decision-making process. While it’s a good idea to keep beneficiaries up to date on the process, executors have authority from the court to make decisions about how to manage the estate.

What Happens If the Executor Is a Beneficiary?

Executor's Responsibilities to Beneficiaries

It’s actually quite a common occurrence that an estate’s executor is also one of its beneficiaries in some capacity. For instance, you might be the executor of your grandfather’s estate, as well as the heir to his house. Most people want to fully trust their named executor, making family and close friends obvious choices.

Should this arrangement come up in your situation, there really isn’t anything to specifically worry about. In fact, many court systems are in favor of beneficiaries also being executors. In short, you can begin the process of probate and estate management as per usual regardless of whether the executor is a beneficiary or not.

Bottom Line

Both executors and beneficiaries have a set of rights throughout the probate process. The court gives these rights to protect beneficiaries and to ensure executors are able to do their jobs effectively.

The best way to avoid issues with the beneficiaries of an estate is to communicate clearly and frequently throughout the process. If beneficiaries feel like they have a good idea of how you’re handling the estate, there is much less of a chance for concern or frustration.

Tips for Planning Your Estate

  • If you’ve got an inheritance coming your way, working with a financial advisor who can help you grow and protect your money might be useful. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A living trust is an estate planning tool that can eliminate the paperwork and headache of the probate process. By placing your assets in your living trust, your successor trustee can supervise the transfer to your beneficiaries.

Photo Credit: © iStock.com/fizkes, © iStock.com/Izusek, © iStock.com/jacoblund

Hunter Kuffel, CEPF® Hunter Kuffel is a personal finance writer with expertise in savings, retirement and investing. Hunter is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from the University of Notre Dame and currently lives in New York City.
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