What Are the Most Common Mistakes an Executor Can Make?

If you have recently been named the executor of a loved one’s estate, you have serious legal responsibilities to wrap up this person’s affairs, distribute the assets of the estate and pay for any income and estate taxes in accordance with relevant laws. Far too often, executors who mean well, and even those who don’t can make mistakes that could expose the entire estate to litigation or even higher taxes.

Some of the most common mistakes can be avoided by ensuring that you have completed proper estate planning and your executor is well aware of the role they will play. Executors can make mistakes, such as:

  • Not paying taxes on tangible personal property.
  • Confusing non-probate and probate property.
  • Failing to hire counsel at a negotiated or reasonable fee.
  • Not liquidating securities.
  • Not following the terms of the will.
  • Inappropriately allocating income between the estate income tax and the decedent’s income tax returns.
  • Making distributions to heirs too early that can expose the executor to personal liability.
  • Failing to choose an appropriate fiscal year for the estate.
  • Not appraising personal property.

In all of these circumstances it is beneficial to plan in advance to minimize the possibility of an executor making costly mistakes that could delay the probate process and the distribution of assets to loved ones.

Our NH estate planning lawyer can guide you through the process of what to do if you have questions about serving as an executor. Schedule a consultation today to get your questions answered.

 

 

What Does a New Hampshire Executor Really Do?

Your legal personal representative or executor, appointed either by you through the creation of your will or through the court, is responsible for finding and then overseeing all of the assets inside your estate. This includes many different important steps, meaning that being an executor is a big responsibility.

Some of the assets that need to be assessed during probate include retirement accounts, stocks and bonds, bank accounts, jewelry, real estate property, and other items of value. It’s important to recognize that not all assets owned by you will necessarily pass through probate. The executor is responsible for paying off any debts or taxes owed by the deceased from the estate, usually by selling the assets that will not directly pass to someone else.

In these circumstances, remaining funds are then to be distributed to beneficiaries. Finally, the executor has the responsibility for filing the personal income tax returns on behalf of the deceased. This can only occur after the full estate inventory has been taken, the value of assets completely calculated, and all taxes and debt paid off. This is the point at which your executor can then seek authorization from the court to distribute whatever remains of the estate to beneficiaries.

It’s important to choose a person who is comfortable serving in this role and is well aware of the responsibilities that it entails. Make sure that your NH executor is legally eligible to hold this position and that you have discussed this responsibility directly with them. You do not want an executor who is caught off guard by being asked to serve in your estate or finds out they have been appointed after the fact.

Are you missing a will in your estate plan? Reach out to our estate planning law firm in NH to get support.

 

Can Anyone Serve as the Executor of a New Hampshire Estate?

One of the most important reasons to create a will, regardless of your age or perception of your personal wealth, is to name an executor. This is because this important role is a person who will carry out the administration of your estate after you pass away.

Their primary job is to protect any of the property that you owned until any taxes and debts have been paid and then transfer any remaining property to your heirs who are entitled to it per your wishes.

Every state has rules about who can and cannot serve as an executor of an estate. Bear in mind that just because someone does meet the statutory grounds to serve as an executor doesn’t mean they want to serve in this role or that they’ll be successful in doing so.

The basic requirements for serving as an executor in New Hampshire are that this person must be of sound mind, meaning that they have not been judged incapacitated by any court, per New Hampshire RSA 21:44,533:4. There is no statute prohibiting a person from naming an executor who has been convicted of a felony in New Hampshire.

The other requirement for an executor in New Hampshire is that the party be at least 18 years old. Potential executors can be rejected by the courts in New Hampshire when they have a conflict of interest or for any reason found to be unsuitable for serving in this role or lack the ability to make sound judgements.

Need help writing your own will or changing who is named as an executor in your current will? Our NH estate planning law firm can help.

 

 

Woman signing paperwork naming an executor to her estate.

How to Make Things Easier for Your Executor

When you name someone as the executor of your estate, you are sending a message that you trust them significantly because this person is responsible for handling all of your affairs when you are no longer around. You are also passing on a lot of tasks and work for this executor because it is a very time-consuming process to wrap up an estate. Woman signing paperwork naming an executor to her estate.

Some of the steps that you take now can make things much easier for your executor and by association, your heirs. The first thing to do is update your trust beneficiary and will designations.

One of the best things you can do for your executor is to leave behind documents that truly reflect your wishes and are easily found after you pass away. Make sure that all beneficiary forms for your retirement accounts, life insurance policies and payable on death designations are fully updated. Be sure that if you’ve created a living trust that all of the relevant assets have been funded inside of it. An executor must also be able to find the documents that you have left behind.

There are legal and financial documents that almost everyone will have or need and these should be organized in one safe place. This can include vehicle titles, birth certificates, divorce decrees, marriage certificates, military discharge paperwork, property tax records, social security records, trust documents, brokerage statements, insurance policies and deeds to real estate.

Where possible, make the extra step to introduce your executor to your professional advisors, such as your life insurance company, brokerage company, bank, and home and auto insurance company. Ensure that some cash is accessible so that your executor can take action sooner rather than later.

Need more help with your estate plan? Set up a time to talk to our law firm about your estate planning program.