Executors have a tough and often thankless job. They have to marshal all the estate’s assets, file tax returns, and distribute property according to the will. Sometimes, they make mistakes. In the first installment we identified two common mistakes by executors. Below are additional mistakes to avoid.
Handling real estate. If real estate is going to be sold, deciding how quickly to do so can pose a minefield for executors. Sometimes an executor can be caught in the middle between one heir who’s living in a house and another who wants it liquidated quickly. And sometimes it’s hard to sell a property unless certain repairs or improvements are made first – but it’s not always clear whether the executor has the authority to use estate funds to make the improvements.
Another issue arises if a property sits empty for a long time. If a house isn’t occupied, it may be hard to obtain insurance for it, and it may become subject to maintenance problems, burglary and vandalism.
Investing estate assets. If an estate will take a long time to settle, executors may be tempted to invest some of the estate assets. That might be okay if the investments are extremely safe, but an executor could be on the hook if an investment loses money and an heir inherits less as a result.
It’s important to remember that while executors have an obligation to conserve estate assets, they have no legal duty to try to grow them.
Of course, the opposite problem can come up if the estate assets are already invested in risky things. In that case, an executor must decide whether to leave them there or move them into safer investment vehicles.
If you have any additional questions or would like to schedule a free consultation, please feel free to contact us at your earliest convenience.