No reason to fret: Executor’s obligations clearly outlined in will
Q: My will reads: “I hereby direct that all my debts, including the expenses of my last illness and funeral expenses and administration of my estate be paid by my Executor as soon as possible after my death. I direct that my Executor pay all estate, inheritance, transfer and succession or other taxes that may be assessed as a result of my death.” Will my executor have to use his personal money to pay for any of this if I have no estate when I die?
A: No. Those sentences are saying that your executor, acting in his or her capacity as executor of your estate, is to make those payments from the assets of your estate, and not from the executor’s personal funds.
If you have no estate, then there definitely will be no estate or inheritance owed. Those taxes apply only when a decedent is worth in excess of $11.5 million.
And if your estate has no money or property, there is no way to pay any of your debts or other expenses. Plus, there would then be no reason to probate your will.
Q: What do you suggest that people do if they have no family or friends who will agree to be the executor of their will? My attorney suggested using a bank. I thought that an attorney could act as executor.
A: You could name a trust company to serve as executor, but your estate needs to be large enough in value to satisfy their minimum requirements. That minimum could be as little as $250,000 or as high as millions of dollars.
You can search “trust companies Houston Texas” to find dozens of places you can contact to see if any of them would be available and appropriate to serve as executor of your estate.
Attorneys can serve as executors in Texas, but most attorneys would never do so. In many other states, attorneys try very
hard to get named as executor because the fees can be significant. Even though the fees can also be high in Texas, attorneys rarely agree to serve.
There are also individuals who are in the business of serving as executors in Texas. In fact, I have been contacted by several of them in the past after I have answered similar questions. You might feel comfortable naming someone like this to serve, and if so, you can search for them on the internet.
But don’t forget that probate in Texas is usually unsupervised by the courts, and that means it would be easy for an executor to gain control of your estate and then never deliver anything to your beneficiaries. A trust company would never do that, and you would hope every lawyer would also act appropriately (given the risk of losing the right to practice law and the possibility of going to jail).
The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase@lipmanpc.com.