Executor's job 'big and thankless'

BY JOHN POYSER 

John Mitchell died on June 6, 2009. A year later his beneficiaries were up in arms. Why? They thought the process was taking too long and wanted their money.

The executor, his nephew, tried to move things along as quickly as possible. He had to take care of dozens of details. Some were urgent, included finding the will and making funeral arrangements. Others were less so, like emptying the apartment and asking for a refund of the damage deposit, cancelling credit cards, distributing heirlooms and going through the deceased's papers. Some were important, but could wait until later in the process. Those included applying for probate and filing a year-of-death tax return.

It took a month or two before the beneficiaries started asking questions.

The lawyers could not prepare the application for probate until the assets were identified, inventoried and valued. That took letters to and from several banks and financial services companies. It took six months before the lawyers were able to obtain a grant of probate . Until that grant was in hand, many of the banks and other asset holders refused to deal with the executor.

By the time six months had passed, one or two of the beneficiaries were harassing the executor. He was getting snarky e-mails.

It was taking time to have the assets liquidated. Each bank and other asset holder had its own set of forms. They kept sending them back, and asking him for more or better paperwork.

By the time a year had passed, one of the beneficiaries was building a new garage . Another had financed the purchase of a boat . The two turned up the heat on the executor .

Most of the work on the estate had been done by that time, but not all of it. The executor was still waiting for the final word on the taxes.

By the time a year-and-half had elapsed, one of the beneficiaries threatened to sue.

At that stage, the executor prepared "accounts" for review by the beneficiaries. Accounts are a detailed statement of all of the money collected and paid out during estate administration. Each beneficiary was asked to approve the accounts before the money would be sent out. Some of them dragged their heels.

It took two years before everything was done, everyone had signed, and all of the money went out.

This story is one that repeats itself over and over. Handling an estate takes longer than people think it will.

There are lessons in this for executors. First, get on the taxes, hard and fast - they take the longest. Second, manage the expectations of your beneficiaries. When they ask you how long the estate will take, say "two years from beginning to end - but I will try to get it done faster if I can." Third, try to surprise the beneficiaries with an interim distribution. That step involves distributing some percentage of the estate midstream. That might mean distributing half of it at the one-year mark.

There are lessons here for beneficiaries, too. Don't spend the money until you have it. Also, remember the job is big and thankless. Cut the executor some slack.

For more information on these matters please, call our office at 305-548-5020.

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