Posts Tagged ‘Executor’

What do Executors do?

Tuesday, August 25th, 2009

So you’re an executor. Now what?

Perhaps the most important part of any Will is the naming of the executor, also sometimes referred to as the executrix (female) or the personal representative. Executor may sound like a scary word, but there’s really nothing scary about it.

Mississippi Code Annotated Section 91-7-47 requires the executor to take possession of the decedent’s estate, and manage it “for the best interest of all concerned,” consistent with the Will and the law.

In general, an executor’s duties are as follows (be sure to consult a Mississippi probate attorney when administering an estate in Mississippi):

1. Locate the original Will.
2. Hire  an attorney to probate the Will.
3. The probate attorney opens the estate and the Court gives the executor Letters Testamentary.
4. Use the Letters Testamentary to locate the assets of the decedent. The Letters Testamentary is the document which shows holders of the decedent’s assets, such as banks, that you are the executor and have the authority from the Court to administer the decedent’s estate.
5. Obtain an inventory and appraisal of the estate if the Will did not waive these requirements. Many Wills do waive this requirement. Check with your probate attorney. Even when the requirement is waived it’s necessary to have a fairly good handle on the value of the estate.
6. Open an estate account. In order to do that the executor will need a Federal Tax ID number. These are easily obtained by your probate attorney or an accountant.
7. Notify creditors and pay any debts of the estate. Once known creditors are paid, the probate attorney notifies the Court through an affidavit. Then a Notice to Creditors is published in the local paper notifying unknown creditors that they ninety (90) days to file a claim or their claim with be time barred.
8. File tax returns and pay all outstanding taxes. Consult your probate attorney or tax advisor regarding paying any taxes owed by the decedent or his estate.
9. Distribute the assets of the estate to the beneficiaries and close the estate. Once the debts and taxes have been paid, the executor should distribute the assets of the estate to the beneficiaries as instructed by the Will. In some cases, a final accounting will be necessary. Upon distribution the probate attorney will seek to close the estate and release the executor from his or her duties.

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Good Bookkeeping Essential for Executors and Personal Representatives

Tuesday, August 18th, 2009

While it is a common practice in the drafting of wills for the testator to waive accounting and inventory in the probate of the estate, that does not mean the other beneficiaries lose the right to object to the mismanagement of the Estate. In Estate of Thomas: Thomas v. Thoms et al., No. 2008-CA-00462-COA, the will contained a similar waiver of accounting. However, when the executor filed his Petition to Close Estate and Discharge Executor, his siblings objected, alleging maladministration of the Estate. The Court ordered the Executor to file an inventory and accounting. Following a trial on the matter and a lengthy review of the accounting  the Court surcharged the Executor $267,477.41, representing the amount of expenditures for which the chancellor could not determine the purpose of the expense. In its findings, the Court gave a detailed account for those expenses listed in the accounting for which the Executor had established a legitimate estate purpose. However, there were other expenses for which the Executor’s records did not contain a purpose for the expense:

The Court will not make further assumptions about the purpose of the remaining checks written on the Estate’s checking account given the complete incomprehensibility of the so-called accounting and the amount of time and the number of opportunities  had to prepare an accounting.

The Chancery Court further stated:

The Court has painstakingly gone through the so-called accounting filed by the Executor and the copies of the more than 1,200 checks written by the Executor on the Estate’s checking account, most of which contain nothing whatsoever on the “memo line.” The Court is asked by [John] to approve his so-called accounting, but to do so would be to approve the unknown; what was the money spent for and where did it come from. The Court cannot approve such an accounting.

The Court of Appeals of Mississippi upheld the chancellor’s decision. Executors and probate attorneys should take note. Even in seemingly simple probates, it is important to keep detailed records regarding expenses. Use that memo line!

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