If you’ve read a will or even if you’ve just seen a movie or television show involving an estate, you are probably familiar with an executor.
When a loved one passes away, the last thing you want to think about is dealing with an estate. But, unfortunately, very often some level of work is necessary to settle the deceased’s financial affairs. The executor or administrator will be the one to do that.
Most wills include a clause that names the executor and often a backup or successor executor. That is, the loved one names in a will the person to oversee the settlement of the estate. This should be someone who will fully and competently act out his or her wishes. Very often, it will be the closest living relative, although it doesn’t have to be. Sometimes, it will be the oldest adult child or the child with the most financial acumen. Or, it may be an attorney or an otherwise uninterested party with some expertise that makes them well-suited for the job.
But on the other hand, if the will doesn’t name an executor, if the named person can’t or won’t serve, or if the individual died without a will, an administrator will be appointed. Any interested person could ask the court for authority to administer the estate. For obviously reasons, this will generally be done by someone who stands to inherit from the estate, although that is not a requirement.
Executors and administrators have the same function. Both are obligated to settle a deceased’s estate for the benefit of heirs. The only difference is the method of appointment. This individual, or fiduciary, will have to sign paperwork in probate court to accept the responsibility and he or she may have to post a bond to give the heirs insurance against misconduct.
The fiduciary has the obligation to timely complete and file all forms required. The fiduciary will have to identify assets and liabilities of the deceased. This may involve appraisals, sales of real property and vehicles, and the liquidation of other personal property. Starting with funeral expenses, he or she will have to see all bills are paid or settled. A common misperception is that a deceased’s bills disappear upon death. While it is true surviving family members would not generally be liable for debts, if there is money in the estate, a bank account, or equity in real property, those assets will be expected to go toward the deceased’s creditors before heirs.
Executors and administrators typically put in significant amounts of work to settle estates. Under Ohio law, they are entitled to be compensated for the work. A will may specify the executor is not to be paid for services, but that most often happens when the executor is an heir and will already be receiving funds. In most cases, the executor or administrator will be paid and that payment is computed as a percentage of the total value of the estate. This may be in addition to attorney fees.
After all necessary filings in the probate court and all debts are handled, the final and primary obligation of the fiduciary is to distribute any residual money or other property according to the instructions in the will. If there is no will, the administrator will have to distribute the estate assets according to the laws of intestacy. Generally speaking, Ohio’s intestacy laws, via what is called the descent and distribution statute, provide an estate goes to a surviving spouse. If there is no surviving spouse, the estate goes equally to the deceased’s children. If the deceased never had children, it goes to the deceased’s parents. If their parents are not living, it goes to the deceased’s siblings, so on.
But as family situations become more complicated, the division likewise becomes more complicated, which is why attorneys are often retained in all but the simplest matters.
This article originally appeared as a column for the Cleveland Jewish News.