Deborah’s father, Abe, died a resident of Brooklyn in March 2018. He was survived by his three children, Susan, Deborah, and Greg. Abe had executed his Last Will and Testament and named Deborah as his Executor, but failed to name a Successor Executor. Abe’s assets are made up of probate assets, as well as non-probate assets. What are the duties of executor? What powers and duties does Deborah have?
What are the Duties of Executor before being Appointed?
The Court must appoint a fiduciary of the estate before the probate assets of that estate (that is, assets that were in the decedent’s name alone and that named no beneficiaries) can be administered. This means that neither Deborah, nor anyone else, can dispose of Abe’s property in any manner. Deborah, or another individual, can only pay funeral expenses or take actions reasonably necessary to preserve the estate, such as paying Abe’s rent or maintenance fees on a condominium or cooperative apartment or paying monthly utility bills.
(Note that a fiduciary need not be appointed before a beneficiary or joint owner of a non-probate asset can collect such non-probate asset. For example, if Abe named Greg as the beneficiary on his Transfer on Death account, Greg would not need to wait for the Court to appoint a fiduciary in order to collect the proceeds from that Transfer on Death account upon Abe’s death. This is because the proceeds of the account automatically pass to Greg by operation of law. Instead, Greg should contact the bank holding the Transfer on Death account and request a list of documents and information that the bank needs before it will distribute the proceeds of the account.)
What Steps Should Deborah take to be Appointed as Executor?
Since Abe died with probate assets, Abe’s will must be offered to the court for probate in order for those assets to be administered. Since Abe named Deborah as his executor, she can petition the court for Letters Testamentary, which would authorize her to collect Abe’s assets, pay his bills and taxes, invest Abe’s property, sell his property, and ultimately administer Abe’s assets in accordance with the Will. (Note that if Deborah does not petition the court for Letters Testamentary, there are other methods of getting a fiduciary appointed. For example, Susan or Greg could prepare a petition requesting that Deborah be named as Executor. Alternatively, Susan or Greg could file a petition to become Administrator, C.T.A. An Administrator, C.T.A., is appointed where the Will either names no Executor or the named Executor died or refused to act and the Will names no Successor Executor.)
While preparing the Petition for Letters Testamentary, Deborah should obtain multiple certified copies of Abe’s death certificate, visit Abe’s residence to collect as much information as possible, prepare a list of Abe’s assets with the estimated values, and prepare a list of Abe’s debts and current recurring bills. While at Abe’s residence, Deborah should collect all of Abe’s mail, prepare an inventory of assets present in Abe’s residence, and look for any documents that would provide helpful information regarding Abe’s estate. Specifically, Deborah should look out for any statements or other documents that would provide information about Abe’s assets and debts, including any bank statements, portfolio statements, utility invoices, bills, and credit card invoices.
It may also be necessary to obtain appraisals on Abe’s property. If Abe owns artwork, Deborah should obtain appraisals on the artwork. In addition, since Deborah believes Abe’s net worth is between $12,000,000 and $15,000,000, she should obtain appraisals on Abe’s real property, Abe’s estate appears to be above both the New York estate tax exemption amount (i.e., $5,250,000) and federal estate tax exemption amount (i.e., $11,200,000). If Abe’s estate does exceed the exemption amounts, Deborah will have to file a federal and state estate tax return and the estate will likely be subject to estate tax. In that case, appraisals are required in order to provide an accurate date of death value for the estate tax return.
What are Deborah’s Duties as Executor Once She is Appointed?
The Executor’s powers are generally set forth in the decedent’s Will, so as Executor, Deborah should make sure that she reads the Will thoroughly before beginning to administer the estate and should keep a copy nearby so that she can refer to it whenever she needs to. An Executor’s powers are also set forth in Section 11-1.1 of the New York Estates, Powers and Trusts Law. Where the Will and Section 11-1.1 contradict one another, the Will governs. However, Section 11-1.1 can shed light on the Executor’s powers where the Will is silent. Generally, an Executor has several powers, including, but not limited to, the following:
- To collect estate assets;
- To accept additions to the estate from sources other than the estate;
- To invest and reinvest the estate property;
- To obtain and maintain fire, rent, title, liability, casualty, and other types of insurance that help to protect estate property;
- Regarding estate property that is not specifically disposed of:
- To collect rents produced by that property;
- To sell such property at public or private sale;
- To lease such property for a term no longer than three years;
- To repair estate property;
- To contest or compromise any claim in favor of the estate or fiduciary, in favor of third persons, and against the estate or fiduciary;
- To execute contracts, deeds, agreements, or other instruments that assist in the administration of the estate;
- To pay the expenses of the estate;
- To distribute the estate assets in accordance with the will.
What are Deborah’s Duties as Executor?
Deborah also has many duties as Executor. Deborah has a duty not to self-deal in the estate assets. Self-dealing occurs where the executor uses estate assets for his or her own benefit, such as if the executor uses estate funds to pay his own bills or make purchases not in connection with the administration of the estate. Commingling is one form of self-dealing that occurs where the executor mixes estate assets with his personal assets, such as by depositing estate assets into his own personal bank account. Whether the fiduciary’s intention is innocent or malicious, the executor should never commingle the estate assets.
She has the duty to act in accordance with the Will. Where the Will grants her discretion, she has the duty to use her best judgment and act in the best interests of the estate.
Deborah also has the duty of loyalty and the duty of impartiality. Simply put, Deborah has the duty to act in the best interests of the estate, rather than in the interests of herself or any other individual or entity.
Deborah has the duty to be a “prudent investor,” a term which is defined by law. Among the prudent investor rules is the duty of diversification, which is the duty to invest in multiple investments rather than putting all the estate’s “eggs in one basket.”
We are available to help you Petition for Probate, as well as assist with all of the estate administration issues once you have Letters Testamentary. We can also help you close the estate.
Additional resources provided by the author
For more information, please contact Guardianship, probate and estate planning attorney Regina Kiperman:
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