When your parents named you as Executor of their Wills after both of them passed you probably thought this was an honor and showed the respect they had for your intellect and good judgment – and likely this was the case. However, if you ever served as Executor of an estate where there are more beneficiaries than yourself you may have more than once wondered what you were thinking in accepting the job.
An Executor who does a good job needs to handle the competing interests of beneficiaries appropriately even where a Will states the estate is to be divided equally among the surviving children. Even a word as straightforward and simple as “equally” can be subject to interpretation and dispute. If you think this is not so consider this as an example – an estate with four children named equally in the Will. An Executor can also be a referee.
First. Consider personal belongings. While it is true many adult children do not want the crystal, china, furniture and other personal belongings of their parents, it is also true that one or more items can become a matter of contention among beneficiaries. Anything can be a cause for dispute. It might be a treasured stamp or coin collection, an engagement or wedding ring or other jewelry, a painting left behind by Aunt Ruth, or even in one case I was involved in, the family turkey plate. Sentiment is not the only consideration. While one beneficiary might want the recently purchased Mercedes, another could claim the kitchen cookware. How do you even out these distributions that are worlds apart in monetary value and make them “equal”? There are ways but they need to be well thought out.
Next, consider that for most beneficiaries the word “equally” means fair. After a parent is gone sometimes one or more children believe that someone has received unequal treatment either during the life of the person who passed or in final distributions. I laugh sometimes when some clients have asked me when is the reading of the Will. There is no such thing in today’s world. The “reading of the Will” conjures images of an attorney seated at a desk reading the Will to all assembled beneficiaries. It comes from fiction. But there is a point of truth. Hiring an attorney who is dedicated to seeing that all beneficiaries see the estate as being concluded fairly and also to seeing it is done right can be well worth the cost. It can help the Executor establish trust. A good estates or elder law attorney can walk an Executor through a minefield of potential disputes and hard feelings and enable most beneficiaries to feel they have been at least been heard.
Remember also that an estate does not just include property that passes by Will. Although the Executor does not control property that passes automatically to joint owners such as accounts and property titled as joint tenants with right of survivorship or property that passes by beneficiary designation such as IRA’s and other tax qualified funds, he or she needs to be aware of this property and, in many cases, this property although not passing under the Will needs to be included in the final Inheritance Tax return.
Consider another issue – real estate. If Mom left the house to Mary, hopefully the Will provided details regarding who pays the bills until the estate is settled. Is it the estate or Mary? If the Will says “equally to my three children” or such similar language and Mary needs to buy out the other two, then ideally there will be an agreement regarding value/appraisal as well as timing and other details. There also needs to be understanding who pays if there is a mortgage on the real estate. Is the property taken “under and subject to the mortgage” or not? All of these understandings should be memorialized in a Family Settlement Agreement that can be prepared by a good estates/elder law attorney. Most Executors are entitled to be paid for their work and I agree. A final Family Settlement Agreement includes an informal accounting where beneficiaries receive their fair share and sign off on the results. The Executor’s work is then complete.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.