Q: My aunt recently passed away and I was appointed executor of her estate. The information letter the Surrogate’s Court sent in the mail says that I am a “fiduciary”, what does that mean?
A: The executor is a fiduciary of the estate and must administer the estate in accordance with decedent’s wishes as stated in the will. Generally, the duties of an executor are as follows:
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Collect and safeguard the decedent's assets;
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Obtain appraisals, if necessary;
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Open an estate checking account;
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Determine the validity of creditors’ claims;
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Pay valid debts and expenses;
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Keep meticulous financial records of your acts as executor;
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File the decedent’s final income tax return and estate income tax returns, if needed;
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File federal and state estate tax returns, if needed; and
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Account and make final distributions to the beneficiaries.
The Executor owes a fiduciary duty to the beneficiaries of the estate. This duty is a higher stand of behavior, which is to act with the utmost loyalty and fidelity. This means putting the interests of the estate and the beneficiaries before your own interests. A fiduciary duty also consists of a duty of good faith and fair dealing, and a duty to act prudently in handling the estate. A fiduciary must also keep meticulous records and refrain from comingling the estate’s assets with their own. In addition, a fiduciary must treat all beneficiaries fairly and cannot favor one beneficiary over another.
If an executor engages in self-dealing, fails to properly safeguard estate assets, or fails to adequately account for actions taken on behalf of the estate, there is a breach of fiduciary duty. If there is a breach, the Court can surcharge the executor to the extent of the breach, the executor can be denied compensation for their services or be removed by the Court.
Acting as executor is a big responsibility. It is a good idea to retain an attorney experienced in handling the administration of estates to ensure that you do not breach your fiduciary duty to the estate and its beneficiaries.
By: Nancy Burner, Esq. & Kera Reed, Esq.