Matthew W. Lucas
Attorney at Law

703.821.5522		e-mail: mlucas@cs.net

Executor's Duty

Usually a person is selected as the Executor for the Estate on basis of ability and personal integrity, as know to the deceased. If the Executor is guided by certain moral principles the more practical matters will probably fall into place, thus, avoiding the legal problems.

Moral Principles:

Loyalty

Every action must be for the benefit of the estate's beneficiaries. Confidentiality is vital. Never place yourself in a position that might favor your interests over the interests of the beneficiaries you are representing.

Prudence

You have a duty to exercise care, diligence, and prudence in dealing with the estate's property. This is especially important when preserving the assets. Do not delegate fiduciary responsibility. The executor may employ counsel and accountants, but he/she must remain the executor until other arrangements are made.

Practical Advice:

Preserving the Assets and Investing

You are obligated to preserve and protect the assets in your custody. This is particularly important in real estate, household furniture, furnishings, and collections (coin, stamp, art, etc.). You are to protect the capital and avoid undue risk; however, you are expected to use reasonable care and skill to make the property/investments left in your care productive. Investing in speculative ventures is not advisable or prudent. Safety is more important than making a fortune. If diversification seems advisable, thorough and clear records should be kept to explain all decisions.

Accurate Records and Timeliness

Periodic accountings should be furnished to the beneficiaries and the court. Keeping good records can point to problems early and be a buffer against later complaints. An astonishing number of lawsuits involve an executor's failure to file tax returns in a timely manner. Penalties and interest charges can be very expensive for late tax returns.

Tax Planning:

In tax planning there are several decisions the executor can make to lessen the tax burden on the estate. Again, filing timely tax returns is imperative.

Communications:

Keeping the beneficiaries apprised of the status of the estate can avoid many potential problems.

Protecting Yourself as Executor:

A good paper trail is probably the best protection for the executor.

Keep all receipts Keep estate accounts completely separate from personal accounts. Obtain receipts when assets are divided. For actions that maybe controversial get court approval (court order authorizing the particular action). Obtain releases which discharge you from liability for actions, or omissions, of the past.

Breach of Duties

It must be remembered: A beneficiary can sue to recover whatever benefits he would have enjoyed had the executor not breached his/her fiduciary duties as an executor.

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