Executor and Fiduciary of an Estate – Understanding Your Role
Probate and estate planning can be a complex process and sometimes difficult to understand. Knowing your role as an executor or fiduciary of an estate is important to ensure all beneficiaries are represented and that nothing is left to the state. In some cases, courts will appoint a fiduciary if an estate has not provided one. If you’ve been selected as a executor or court-appointed fiduciary, here some basic responsibilities you should expect:
- Collect Assets and Pay Bills: Probate involves paying creditors and debts as well as distributing an inheritance to beneficiaries. As an executor, you will be expected to collect the decedent’s assets and determine and pay the lawfully enforceable debts of the decedent using the probate assets. After your loved one passes, the probate court will notify all creditors that he/she has passed away. Creditors then must respond to the court within a certain time frame or else their claim is lost.
What if my loved one‘s estate owes more to creditor’s than what‘s left in the estate? As an executor, will I have to pay the balance?
NO! Debt dies with death. If you’re an executor in Ohio and the deceased owes more than the estate you will not owe the balance. This scenario is paralleled with a bankruptcy. In other words, the creditors are out of luck.
2. File Returns and Pay Taxes : As an executor, you are expected to pay and file for all the necessary taxes. The executor must file the decedent’s tax returns, including final income tax and estate tax returns (federal, and other states, if required), and to pay any tax shown due on those returns. Note that federal estate tax will vary depending on several key facts. First, the federal exemption is currently $5.4 million for the year 2016. For married couples it brings the total to over $10 million. Surviving spouses take free from ALL federal estate tax up to $10.8 million. It’s important to talk with your estate planning attorney to understand all of the tax consequences. However, understanding the federal exemption is paramount.
3. Distribute Assets: The executor and/or fiduciary is expected to be able to distribute probate assets remaining after payment of claims, expenses, and taxes to the decedent’s lawful heirs are made (next of kin, legatees, or devisees).
The court is asking me to sign a waiver. Does this mean I wont receive my inheritance?
No. Consult with your local estate planning attorney first however, in most cases when a court is asking you to sign a waiver they are typically asking you to allow correspondence through regular mail. If you’re a direct relative of an estate and a will is being administered then you will receive notice that an estate has been opened (in Ohio). Waiving certified mail speeds the process up and allows the probate court to mail items through regular mail.
Administering the estate of a loved one does not have to be complicated and there are attorneys who can help. If you are an executor or administer of an estate and need assistance, contact Baron Law LLC. The attorneys at Baron Law are there to help answer your questions and provide sound legal advice. Contact Cleveland, Ohio attorney Dan Baron today at 216-573-3723 for a free consultation.