You’ve just lost a close family member. While you grieve, you discover that they named you as the executor of their estate. Suddenly, you find yourself thrust into the complex world of probate law, tasked with settling their final affairs. It's a daunting responsibility that can quickly become overwhelming.
As the executor of an estate in California, you play a critical role in ensuring your loved one's final wishes are fulfilled. From identifying and managing assets to paying debts and distributing property to heirs, executors handle a wide range of duties. While it's an honor to be entrusted with this critical job, it also comes with legal obligations and potential liability.
Navigating the intricacies of California probate law isn't easy, especially when you're already coping with the loss of a loved one. Working with an experienced California probate lawyer like the ones at Kavesh, Minor & Otis can ease the burden and help you avoid costly mistakes. Let's take a closer look at what it means to be an executor and how a lawyer can assist you throughout the process.
Locating and Safeguarding Estate Assets
One of the executor's first and most important tasks is to identify and secure all estate assets. This involves tracking down everything the deceased person owned, including:
Real Estate and Personal Property
As executor, you'll need to identify all real property that the deceased owned alone or with others, such as houses, land, and commercial buildings. You must also locate all valuable personal property, including furniture, appliances, electronics, antiques, and sentimental possessions. It's crucial to secure these assets quickly so they aren't lost, stolen, or damaged before they can be appropriately inventoried and appraised. For example, you may need to change locks and update insurance policies.
Bank Accounts, Stocks, Bonds, and Other Financial Assets
The deceased may have accumulated significant wealth in bank accounts, investment accounts, retirement plans, pensions, stocks, bonds, and insurance policies. As executor, it's up to you to contact each financial institution, notify them of the death, and begin transferring the assets to the estate. You'll need to determine how each asset is titled to ensure you have the legal authority to possess it.
In some cases, locating assets can be a significant challenge, especially if the deceased kept poor records or had far-flung real estate holdings. If you're feeling lost, a probate lawyer can assist in the search and advise you on securing the assets you find.
Vehicles, Art, Jewelry, and Collectibles
Executors must take special care to locate and safeguard the deceased's possessions, as these items can easily disappear if not properly secured. Classic cars, boats, artwork, jewelry, coins, heirlooms, and other rare collectibles should be cataloged, photographed, and appraised as part of the estate inventory. You may need to change the locks on garages and storage units and consider purchasing additional insurance coverage to protect these unique assets.
Business Interests and Intellectual Property
If the deceased was a business owner, the executor may be responsible for managing the company and any associated intellectual property until it can be appropriately valued and transferred to heirs. As executor, you will step into a management role and must make prudent decisions to maintain the business's value and guard trade secrets. Whether it's a sole proprietorship or the deceased owned shares of a corporation or membership units in an LLC, a probate lawyer can help you manage business interests.
Debts Owed to the Estate
Sometimes, the estate may include outstanding loans the deceased made to family members, friends, or business associates. The executor must formally notify these borrowers of the death and collect on these debts, as they are rightfully part of the estate. Debtors may be reluctant to pay or lack the funds to satisfy the loan immediately. A probate lawyer can help you understand the legal tools available to collect estate debts, including filing a lawsuit if necessary.
Initiating and Managing the Probate Process
For estates valued at over $184,500, the executor must generally file a petition with the probate court to formally open a probate case and be appointed the estate's legal representative. The executor is responsible for managing the case from start to finish, including:
- Sending notice of the probate case to heirs, beneficiaries, and creditors
- Preparing an inventory and appraisal of estate assets
- Handling day-to-day estate affairs, such as paying bills, filing taxes, and responding to creditor claims
- Updating the court on the status of the case through required hearings and filings
- Proposing a final distribution of assets and closing the estate once all obligations are satisfied
Probate can be a lengthy and bureaucratic process, lasting months or even years for complex estates. Having a knowledgeable probate attorney on your side can streamline the process and give you peace of mind that you're not missing any crucial steps. Your attorney will ensure you meet key filing deadlines, coach you through court appearances, and be on-call to answer any questions.
Executor Communication With Heirs and Beneficiaries
Executors must keep open lines of communication with the deceased's heirs and anyone named as a beneficiary in the will. You'll need to notify them that the probate process has started, keep them informed about the estate's status, and be transparent about your activities as executor.
Heirs and beneficiaries may be anxious to receive their inheritance, especially if probate seems to drag on. Some may second-guess or challenge your actions and decisions as executor. If a dispute arises, it's wise to have a probate lawyer to turn to for objective advice and strategic counsel.
An experienced attorney can provide a buffer between you and disgruntled heirs, defuse heated conflicts, and protect you against allegations of executor misconduct. They can also mediate family disagreements and propose creative solutions that enable you to settle the estate as efficiently as possible.
Paying Debts, Taxes, and Estate Expenses
Before the executor can distribute assets to heirs, they must settle all legitimate debts and obligations of the estate. The executor is responsible for determining which creditor claims are valid, rejecting improper claims, and paying all approved debts.
The executor must also ensure all income and estate taxes are properly filed and paid. Large estates may owe federal estate tax, and the executor might need to liquidate assets to cover this substantial bill. If the deceased had employees or owned a business, the executor may also have to deal with payroll taxes, back taxes, and other complex tax issues.
Executors are also permitted to charge the estate for any legitimate out-of-pocket expenses they incur in settling the estate, such as postage, copying costs, and legal fees. The executor must keep detailed records and receipts of all transactions and may need court approval before making certain payments from estate funds.
Overseeing the estate's finances and making distributions to heirs is one of the executor's most daunting responsibilities. Tax filing deadlines and creditor claim cutoffs must be strictly followed, or the executor can be personally liable. A probate lawyer can ensure you satisfy debts and taxes in the proper order of priority and retain enough funds to cover the estate's obligations before you make distributions to heirs.
Distributing Assets to Heirs
Once all debts, taxes, and administration expenses are paid, the executor's final task is distributing the remaining assets to the deceased's heirs and beneficiaries. If the deceased had a will, the executor must follow its instructions. California intestate succession laws determine who inherits if the person dies without a will.
The executor may need to liquidate assets—such as real estate and investments—to create distributable cash. Some assets, such as real property and vehicles, may need to be retitled into the beneficiaries' names. The executor must have each heir or beneficiary sign a receipt and release before distributing assets.
In some situations, heirs may disagree with the distributions, or the will may be unclear. There could be assets that are difficult to value and divide fairly. If the estate contains an operating business, the executor may need to continue managing the company until it can be appropriately transferred or sold. A probate lawyer can help you arrive at an equitable distribution plan and ensure each asset is transferred correctly with the necessary documentation.
