Asset Distribution: Can an Executor Decide Who Gets What?
When a loved one passes away, you may find yourself appointed executor of their estate. This role comes with significant legal duties and responsibilities. But it also involves discretionary decisions, like when and how to distribute assets to beneficiaries.
Can an executor decide who gets what? Or must you strictly follow the deceased’s will or state law?
In this article, we will clarify an executor’s authority over asset distribution. With our probate guidance, you can settle the estate impartially while honoring the decedent’s wishes.
What Authority Does an Executor Have?
Serving as executor is an honor. But it’s also a complex undertaking, so let’s review what powers you have – and what limits you face.
Executor’s Fiduciary Duties
As executor, you take on fiduciary duties to the estate. This means you have legal obligations to act in certain ways, including:
- Acting in the best interests of the beneficiaries. You’re managing assets on their behalf, so your decisions must benefit them.
- Being prudent and diligent. Carefully manage liquid assets like bank accounts and brokerage funds. Also, secure physical assets like vehicles.
- Maintaining detailed records. Closely track income, expenses, asset distribution, and more. Keep organized files.
- Keeping beneficiaries informed. Communicate regularly on estate progress. Proactively provide status updates – don’t wait for them to ask.
Fulfilling these core duties ensures impartial, thorough estate settlement. But your powers aren’t unlimited.
Limits on an Executor’s Authority
While executors have discretion in some areas, your core decision-making is bounded by:
- The deceased’s will. You must follow their distribution wishes rather than diverging based on your own judgments.
- Court oversight. For certain actions, like modifying distributions, you’ll need court approval even if beneficiaries agree.
- Self-dealing bans. As executor, you cannot purchase estate property or otherwise profit from your position. Put estate interests first.
So, while you have some flexibility, your primary duty is to remain impartial and distribute the estate according to the decedent’s intentions.
Key Decisions an Executor Can Make
While executors can’t modify the will or ignore court oversight, they have meaningful discretion in certain areas. Here are some examples:
Timing of Distributions
You decide when estate assets are paid out to heirs and beneficiaries. Consider their financial needs, but don’t feel pressured into premature distributions. Paying debts, taxes, and final expenses should generally come first.
You can make partial distributions along the way to ease beneficiary anxiety during the often lengthy probate process. But it’s wise to maintain a reasonable reserve fund to cover contingencies through the end of probate. Don’t leave the estate cash-poor too early.
Regarding partial distributions, you have the latitude to authorize payouts before the estate closes. This helps meet beneficiary financial needs before less liquid assets can be sold.
For example, you may issue partial distributions from available cash to cover the living expenses of a beneficiary who depended on the decedent for support. Just ensure sufficient liquidity remains to pay final costs.
Sale of Assets
Selling property is sometimes necessary to settle the estate, especially if debts and taxes exceed liquid assets.
As executor, you can liquidate personal property like brokerage accounts, vehicles, jewelry, or other valuables. Use prudent judgment around sentimental items – don’t auction heirlooms on a whim. And remember, real estate sales usually require court approval.
For assets specifically gifted to beneficiaries, it can be helpful to consult them before selling, if feasible. Though you have final authority on liquidating estate assets, discussing plans with beneficiaries first for items of particular sentimental value can ease tensions. Beneficiaries may prefer you sell other assets first, or they may agree with your reasoning once explained. Clear communication upfront heads off potential complaints down the road, even if you ultimately proceed with the sale as executor.
When Court Approval Is Required
To ensure impartiality, court permission is needed for certain major actions, such as:
Changes to Will Instructions
Suppose the will splits the estate equally among siblings, but the heirs mutually agree one sibling should get a larger share for caregiving reasons. In that case, you need a court order approving this distribution modification.
Judges won’t permit deviations from the decedent’s express wishes without good cause since you’re duty-bound to execute their intent. The court order provides legal cover from complaints later.
Removal of an Executor
If beneficiaries believe you’re mismanaging the estate or acting partially, they can petition the court to remove you as executor.
While rare, the court can remove executors for self-dealing or apparent failures to perform duties after a hearing. This emphasizes the need for transparency.
Best Practices for Executors
Settling an estate is demanding, but you can avoid missteps by:
- Being transparent with heirs. Communicate regularly, address concerns, and explain decisions.
- Seeking legal counsel strategically. Consult estate planning attorneys around major decisions impacting distributions or asset sales.
- Making impartial decisions. Don’t play favorites with feuding family members. Prioritize facts over emotions or pressure.
- Avoiding conflicts of interest scrupulously. Never put your personal financial interests before estate needs.
- Documenting diligently. Keep detailed records demonstrating you fulfilled your duties should anything be questioned later.
Get Legal Guidance for Worry-Free Probate
Serving as an executor can feel daunting, with competing pressures from heirs and legal complexities around asset distribution. But you don’t need to shoulder this alone.
With our team of probate attorneys advising you every step of the way, you can avoid missteps and confidently distribute the estate’s assets. The Browne Firm becomes your knowledgeable partners, fielding beneficiary questions, facilitating court approvals, and ensuring you fulfill your fiduciary duties impartially.
We’ve earned a reputation for providing practical guidance that protects our clients and honors the decedent’s wishes. Put our experience to work for you. Schedule a free case assessment today, and let’s review your situation.