Unfortunately, when a loved one dies, arguments may arise among the heirs to the estate (also known as the beneficiaries). One potential area of dispute may involve a commission due the Executor for serving in that capacity. The following is a brief overview of the Executor’s role, and an example of the type of problem that may surface.
Many of us have accumulated assets over the years (for example, a house, stocks, jewelry, and personal mementos). When you prepare a Will, you can specify how you want these assets (your “estate”) distributed once you’re gone. Also, in your Will, you can designate the Executor(s) – the person, persons, or entity responsible for “settling” the estate in accordance with the terms of your Will.
Among the key things the Executor must do is
– identify all the assets left upon your death, determine the value of those assets, gather the assets, and protect them.
– use the assets to pay off all your debts and expenses, including all outstanding federal and state taxes.
– distribute to the beneficiaries whatever assets remain after all debts, expenses, and taxes have been paid.
Disputes Among Beneficiaries
As the above suggests, the Executor’s responsibilities may be very time consuming. Settling an estate may often take one or more years. Under the law, an Executor is entitled to receive a commission for his efforts.
However, if you do not want your Executor to receive a commission, you should state that in your Will. If you neglect to do so, circumstances may arise that result in disputes among beneficiaries.
Upon the death of their mother, Susan and her two brothers, Jack and Robert, became the sole beneficiaries of their mother’s estate. In their mother’s Will, Jack was designated as Executor, and he was instructed to divide the estate equally among the three siblings. Problems arose when, upon fulfilling his Executor responsibilities, Jack presented his siblings with a written accounting as required by law. The accounting specified how the estate was settled, including all expenses, debts, and taxes paid out, the inheritance each of the siblings would receive, and the commission due Jack from the estate for serving as Executor.
Susan and Robert were outraged. They clearly remembered their mother saying that she did not want Jack to collect a commission for serving as Executor. The problem was that their mother never included this information in her Will. So, under the terms of the existing Will, Jack was entitled to the commission. Many heated arguments ensued. Jack did ultimately collect his commission, but Susan and Robert never forgave him!
It’s not enough to inform family and friends of your intentions. To help preempt feuds after you’re gone, you need to make sure that your Will accurately reflects your wishes. Once you’re gone, you won’t be able to correct mistakes or omissions.
Getting Legal Help
Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs. She can work with you to help insure that your Will accurately reflects your intentions. Contact us today at 973-841-5111.