Who’s on First? The Executor

One of the biggest myths in Probate law is that the lack of a Will causes Probate. That’s not the case. The lack of a Will simply means that the Probate that is filed is “intestate”, which means that the State Law determines who the beneficiaries are. The next biggest myth is that the biggest problem in not having a Will is that the State chooses your heirs, instead of you. Although that statement is true, the heirs chosen by the State are most likely the heirs you would want anyway, had the decedent written a Will. For example, if you die without a Will and you are married, with no children, then it all goes to your spouse. If you are married with children, and the children are all from the same spouse, then your assets all go to the spouse. If you are married with children from a prior relationship, then the assets are generally split 50% to your spouse and 50% to your children. This is generally what a decedent would want anyway. To me, and in my 40 years of Probate experience, the biggest challenge in not having a Will is the fight over who is going to be the Executor. Who’s on First? The purpose of this Article is to discuss the important role of being the Executor, or in some States this role is called the Personal Representative.

Some people want to convince themselves that it doesn’t matter who the Executor is. These people say that my Estate is simple in that there is just a house, a car and a few bank accounts. What can go wrong? Everything is spelled out clearly how the Assets will be divided. Well, a deeper dive into the duties of the Executor will reveal why being the Executor is a very critical role. And, if you have been named as the Executor, but someone is trying to get you to step down in favor of them, think twice and call a lawyer before doing so. A large percentages of the calls we get at Jet Probate are dealing with a disgruntled beneficiary, who was named the Executor, but chose to step aside in favor of someone else. Or a disgruntled beneficiary in the amount of time the Probate is taking, or the amount of fees and expenses being incurred.

And what if the decedent died without a Will, who has priority within the family to be the Executor? To me, this is the biggest fight that we see in Probate cases at Jet Probate when there isn’t a Will. If there is a surviving Spouse, then that Spouse has priority. But what if there is no Spouse, but there are 3 children, now who has priority? Well, the State Law probably dictates that all 3 have priority. Now, how much more expensive is the Probate going to be if we have a “committee of Executors”. How much more challenging are the decisions? In theory, each of the 3 children could hire their own lawyer to represent them in their role as Executor. Get your check book out. In my opinion, barring other circumstances, the one that lives in-State should probably take on that role. But, it could come down to who has the time? Who has training or experience with dealing with assets, selling a home, etc.?

Generally, the Executor is the one that hires the lawyer. Although the lawyer ethically represents the entire Estate, and not any one Beneficiary, it is only natural that the Executor spends the most time with the lawyer and has the benefit of association with that lawyer, even though that lawyer doesn’t “represent the Executor in his or her capacity as a beneficiary.”

The Executor also controls the checkbook. He or She has the power to spend. They can use Estate money to “defend themselves.” In a battle, the Executor has the upper ground. In baseball, the Executor is already on base. They have the ability to “reimburse themselves for reasonable expenses.” What are “reasonable expenses”? No bright line answers.

In our simple example above, of a house, car and some bank accounts, let’s look at some issues and decisions that are controlled by the Executor. Some of the biggest ones will surround the issue of selling the House. The timing of the sell. The amount it is sold for. Whether you sell it for cash or do you use the bank accounts to fix it up before you sell it? Do you sell it the traditional way with a realtor or do you accept a discounted “cash offer”? Are you better off to wait until interest rates come down, so that values go up? What if one of the beneficiaries wants to purchase the House, what value do you put on it? Do you need an Appraisal? What if two people want it? What if there is a mortgage on the Property? Can it be assumed? I think you are starting to get the point. A Will can’t specify all of the answers to all of these questions. Many of the calls to Jet Probate surround the selling price. It wasn’t enough. Or the Executor is asking too much and it won’t sell. You need the cash now, but the Executor, who is also a beneficiary, doesn’t. If you are named the Executor, generally you don’t want to step aside. It is no problem if you are Out-of- State. A large majority of our clients are Out-of-State Executors. You can read more about this in other Articles on this Jet Probate website.

What about the car, do we sell it, give it to one of the family members that needs a car? Give it to charity? Sell for top dollar, or just unload it? Not real earth shaking decisions but could have a lot of emotion tied to these decisions if one family member is adamant that they want the car. Remember, the Executor is on first base in our baseball analogy.

Now, let’s talk about cash, the Bank Accounts. What expenses get reimbursed and what expenses don’t? For example, what about “shipping the car” to a beneficiary on the East Coast? What if that beneficiary is also the Executor? Is the shipping cost more of a personal expense, or an expense of the Estate? What about flying the beneficiaries back home for the funeral? What about the Executors expenses for a flight, hotel and food? What about offsetting a beneficiary’s share of the cash to balance out loans that were given by the decedent to that beneficiary? You can start to see that many of these issues weren’t spelled out or even contemplated in the Will. And certainly, if a decedent died without a Will then the only clear thing that is spelled out is spelled out under State Law, and that is that we know who the ultimate beneficiaries will be. And a Will simply provides the big picture of splitting up the Assets, the “tent poles” if you will. The Executor has to make a ton of small decisions, that are financial in nature. That may appear to benefit the Executor, or his or her children.

How about dividing of the Personal Belongings? The Executor is the first person to gain access to the house and all of the belongings. Probate lawyers hate fights over personal belongings. It’s always amazing how mom’s diamond ring disappears and nobody knows what happened to it. Or that mom whispered in everyone’s ear, at different times, that they would be the one to inherit the ring. Even if we find the ring, and there is no Will specifying who gets it, now what? Do we sell it? What about the sentimental value? What about the monetary value? How will it be fairly divided? The Executor is on first base to decide all of these issues.

What about the timing and efficiency in handling the Probate and getting things done and settled? The Executor controls the timing on how fast things move along. Many times the Executor wants to “play Santa Clause” and hand out the goodies. What are your remedies as a beneficiary when you have a bad Executor who is passing out too many goodies to himself or herself? Your only real hope, besides paying your own lawyer money to write nasty letters, is to file a Petition with the Probate Court and let a judge decide if the Executor is being fair. But, remember, these are hard cases to win and throw out an Executor because the standard of care is “reasonableness”. Three children may have three different opinions as to what is “reasonable” as to most of the issues raised above. The bottom line is that it is time consuming and expensive to constrain a bad Executor. Get your checkbook out and roll the dice. You can’t just call the Judge up and complain. You have to file legal documents, and the other side has time to file more legal documents. And lawyers play the delay game. That’s why if you are named for that role, generally you want to accept it.

What’s fair compensation for the Executor? Being an Executor takes a fair amount of time. Many don’t want to charge the Estate any fees at all for their time. Some do. Generally, we encourage Executors to charge a fee for their time because we want to make sure they are fulfilling their duties in a timely manner, not a “back burner manner’. Is $125/ hour fair? Or is $75 more fair? Reasonable minds will have a difference of opinion. My point is that you don’t want to be the Beneficiary fighting the Executor that the compensation he or she took wasn’t fair. There again, get out your check book. You would rather be on first base.

Hopefully you now understand that at Jet Probate, we generally want to represent the Executor, not the Beneficiaries. We want to have the decision maker. The guy that controls the check book. The guy that has the upper ground. And, if you are named in the Will for that position, you generally want to retain that role. If the decedent died without a Will, then you surely want to call Jet Probate so that we can get you appointed the Executor role and obtain the higher ground. If you have any questions about this article, email me at matt.dana@jetprobate.com. I am the Managing Partner and can answer your questions. I am the one with over 40 years of Probate experience. Like the Farmer’s Insurance commercial we used to see on TV, “I know a thing or two because I have seen a thing or two”.