The executor of an estate makes sure the estate is settled and distributed according to the documented wishes of the deceased. In so doing, the executor has significant responsibilities, which include protecting the interests of the estate and all of its beneficiaries, documenting and distributing estate assets, and preparing and filing an estate tax return.
Even in the best of times, these duties require attention to detail and constant consideration of relevant deadlines and the best interests of the estate and its beneficiaries. But what happens to the duties of an executor in a crisis such as the 2020 coronavirus pandemic? The duties do not change at all, but executors may need to make adjustments in how they carry out their responsibilities.
How the Pandemic Affects the Duties of an Executor
Typical duties of an executor include identifying and keeping a watchful eye on all estate assets, dealing with estate matters in a timely fashion, and carrying out the wishes of the deceased as documented in estate planning documents. The executor owes a fiduciary duty to identify, preserve, and distribute the estate to its beneficiaries, a high-level obligation to protect the financial interests of those to whom it is owed. Put another way, a fiduciary owes to the estate and its beneficiaries complete loyalty, honesty, and candor and must act in accordance with the best interests of the estate and its beneficiaries.
Times of crisis, such as the global coronavirus pandemic, may complicate carrying out those duties. Stay-at-home orders prevented meetings with beneficiaries and financial institutions, the ability to gather documentation about estate assets, and, in some cases, the ability to pursue probate cases in court. Still, personal representatives in West Virginia (WV), Kentucky (KY), and Ohio (OH) must find ways to fulfill their fiduciary duties in a pandemic or when other roadblocks prevent business as usual.
Sample List of Fiduciary Duties for Personal Representatives in WV, KY, and OH
Upon death, the decedent’s assets and liabilities become assets and liabilities of the decedent’s estate, a new legal entity. The executor, sometimes called the personal representative, acts as a general contractor for the estate. As the person in charge of administering the estate, the executor performs or engages someone else to perform tasks like these:
Identify all estate assets and debts whether or not they are listed in the estate planning documents;
Open a probate case when necessary to distribute the estate;
Identify and notify all who qualify as beneficiaries of the estate;
Manage and protect estate assets and use estate funds to pay estate debts until the estate is closed;
Prepare (or hire someone to prepare) and file estate tax returns; and
Distribute the estate assets in accordance with the estate planning documents.
Some of an executor’s responsibilities require special knowledge or experience, such as navigating probate proceedings, knowing how to protect certain types of estate assets, or preparing and filing an estate tax return. Executors in WV, KY, and OH may be best served by hiring professionals like an experienced estate administration attorney, a financial advisor, or an accountant to perform such tasks.
Performing Fiduciary Duties in a Pandemic or Other Crisis
In the normal course of events, an executor has or knows where to obtain a copy of the decedent's will and other estate planning documents. These documents are the starting point for the executor’s tasks. One of the first duties of an executor is to review these documents to determine next steps. Depending on the instructions left in the estate planning documents, an executor may also need to open an estate in the probate court where the decedent resided at the time of death and create an inventory of the estate.
Whether or not probate is necessary, the executor will need to identify the decedent’s assets and liabilities at the time of death. For some assets, such as bank and financial accounts, the executor will need to make contact to advise of the decedent’s death and the transfer of ownership to the estate.
In times of localized or wider crisis, the executor’s job may be complicated by closed offices, business closures, or illness. In such cases, visiting professional or government offices or the decedent’s home may be difficult if not impossible. In such cases, an executor can fulfill the fiduciary duty by planning and making contact with necessary parties as much as possible with contacts by phone, Internet, or mail.
Knowing what an executor must do and how to perform those duties is not common knowledge. Personal representatives in WV, KY, and OH often hire and greatly benefit from working with an experienced estate administration attorney who can provide guidance on the executor’s responsibilities and how to accomplish them even when the normal means of accessing necessary information and offices are impossible due to a crisis.
Consequences of Breach of Fiduciary Duty in Estate Administration
A beneficiary who believes an executor’s conduct constitutes a breach of fiduciary duty to the estate or one or more beneficiaries may file a claim in the probate case. If the beneficiary can show the existence of a fiduciary duty and that the executor breached that duty, the executor may be found personally liable for damages. In other words, the executor could be ordered to use personal assets to pay a damages award. Following are examples of executor conduct that can result in breach of fiduciary duty claims:
Distributing estate property in a manner that does not follow the instructions in the estate planning documents;
Distributing estate property in a manner that favors one beneficiary over others;
Self-dealing, in which the executor favors him- or herself in distributions from the estate;
Commingling of estate and non-estate assets; and
Failing to protect or preserve estate assets.
The duties of an executor can be complex. With this level of personal liability and risk, no executor should walk into probate litigation without representation from an experienced estate administration attorney.
Where to Turn for Help with the Duties of an Executor in WV, KY, or OH
Agreeing to serve as an executor means assuming significant responsibilities and an obligation to take care of and distribute those assets to the beneficiaries per the decedent’s instructions. Because of the legal obligations an executor assumes and the estate administration laws and processes involved, many feel insecure about serving in this role.
Executors in WV, KY, and OH seeking experienced guidance turn to estate administration attorney Anna M. Price at Jenkins Fenstermaker, PLLC. Whether you need assistance regarding the duties of an executor or need help in litigating a claim asserting breach of fiduciary duty, Anna and her team are poised to help. For a consultation, call (304) 523-2100 or complete this online contact form.