The executorship role
What you should know about being an executor
Being asked to be an executor is an honor you might want to pass up. At best, the process is time-consuming. At worst, it takes hundreds of hours, exposes you to lawsuits and thrusts you into the middle of family fights.
Here’s what you should know:
Time commitment
The time involved in settling an estate varies enormously.
A small estate with few debts might be distributed within six to 12 months. It may take years to finalize a large estate with contentious heirs, lots of creditors or assets that are difficult to value, such as a business or rare collectibles.
A survey by EstateExec, an online tool for executors, found the typical estate took about 16 months to settle and required 570 hours of effort. The largest estates, worth $5 million or more, took 42 months and 1,167 hours to complete.
That doesn’t necessarily mean the executor has to put in that many hours, says Russ Weiss, a certified financial planner.
“If you have other professionals involved — an attorney, a CPA, an investment person or wealth advisor — they’re doing most of the heavy lifting,” Weiss says. “Executors are like the quarterback in the administration of the estate.”
Executors may also collect a fee, with the amount depending on state law or what’s specified in the estate documents.
Leg work
Even with help, executors should expect to spend many hours finding documents, inventorying assets and debts, arranging appraisals, communicating with financial institutions and government agencies, managing property and keeping careful records.
If the estate includes a home, the house may have to be emptied of possessions and readied for sale. The less organized the estate, the more time it may take to track down assets.
Legal risk
Executors have a fiduciary duty to the beneficiaries, which means the executor is required to put the beneficiaries’ interests first. People are typically advised to choose executors who are responsible, honest, diligent and impartial.
“It’s an honor. If somebody asks you, it’s to say, ‘I trust you, and I trust you implicitly that you will handle my affairs in a way that’s fair,’” Weiss says.
However, executors can be held personally responsible for mistakes and other problems. Unhappy heirs can sue over those decisions, as well.