The Role of the Estate Executor

Estate planning – the process of distributing your assets to your loved ones when you’re gone – is generally accomplished in one of two ways – a last will and testament or a living trust.

In a will, the testator, or person writing the will, names a personal representative who will become the executor of the estate during probate proceedings after death. In a living trust, the settlor who authorizes the trust names a successor trustee, who will oversee the distribution of the estate.

One big difference is that a will must go through probate court proceedings, with the court supervising the executor. In executing a trust, the trustee will have nearly the same responsibilities as an executor, but the proceedings will take place outside of probate court.

In both cases, the personal representative and successor trustee will often be family members, close friends, or associates. They both will have a fiduciary responsibility to act in an honest and straightforward manner in executing the terms of the will or the trust.

If you have been named a personal representative or a successor trustee near Oakland, California, and you have questions or concerns about your role now that the testator or settlor has passed away, contact Davidson Estate Law. Our estate planning and probate team is responsive and approachable, so we will provide a comfortable atmosphere for you to air your concerns and receive the legal guidance you’re seeking in a time of loss and family grieving.

Davidson Estates Law proudly serves clients in Walnut Creek, Berkeley, San Francisco, El Cerrito, Alameda, and throughout the Bay Area of California.

What Is the Role of the Executor?

The executor must carry out their duties under the watchful eyes of a probate court judge. This does not mean that every action will be scrutinized, but reports and accountings of estate transactions must go to the court. Sometimes, the executor can feel overwhelmed by these requirements, so the help of an experienced probate attorney can be vital.

The personal representative’s first step is to present the will to the court, which will then appoint that person the executor of the estate. The next step is to notify all beneficiaries and creditors that probate proceedings have begun. The executor must also set up an estate banking account to place cash assets and pay ongoing bills, if any, such as mortgage or utilities.

The executor must collect all assets under the name of the estate and if necessary, sell some off to pay creditors. Taxes must also be paid. When all legal obligations have been met, the executor can then move to distribute estate assets as dictated in the will.

What Is the Role of the Trustee?

Most estate planning in California involves the creation of a living trust, which involves naming a successor trustee. While the settlor manages the trust while still physically and mentally capable of doing so, the successor trustee is empowered to take over in two situations – incapacitation of the settlor or the death of the settlor. This is a major difference between a personal representative named in a will and a successor trustee. The personal representative has no role until the testator dies.

In the overall picture, when the settlor of a trust passes on, the role of the trustee is not that much different than that of the executor. Though the execution of a trust occurs outside of probate court for the most part, the trustee is still covered by probate law.

According to Probate Code Section 16000-16015, the trustee has a duty to “administer the trust according to the trust instrument” and to “administer the trust solely in the interest of the beneficiaries.” This is another way of saying that the trustee has a fiduciary responsibility toward honoring the trust instrument.

A trustee is not bound by California law to notify creditors, but not doing so can create problems later when a creditor or two may file claims that slow down and complicate the process. In other words, notifying creditors along with beneficiaries as the first step of administering the estate is advised.

You must also assemble and collect all assets, open an estate account, sell off assets as necessary, and pay creditors before the terms of the trust document can be implemented; that is, assets are distributed to beneficiaries. Taxes must also be paid.

If you seek to invest some funds, California’s Prudent Investor Rule requires that the funds must be invested responsibly for the benefit of the beneficiaries. Trustees cannot make investments that endanger the trust.

Fortunately, the strict reporting and accounting requirements that an executor in probate court has to follow do not apply in the administration of a trust, but keeping beneficiaries in the loop is an important step. All your actions should be transparent to all. Records of all sorts, including accounting, must be maintained. 

Once all debt and other obligations have been met, the trustee can move toward distributing the estate to the heirs and beneficiaries as specified in the trust document.

Potential Pitfalls

In the administration of a will or trust, one problem that can severely delay and complicate proceedings is if beneficiaries feel shortchanged or left out and file challenges. Grounds for challenges normally involve charges that the testator or settlor happened to be influenced by one person to change the terms in that person’s favor or that the testator/settlor lacked the mental capacity to complete the legal instrument.

Another pitfall can arise if the executor or trustee provokes suspicion among the beneficiaries. This is why it is so important to be transparent in all your transactions in settling the estate.

Of course, there are also creditors who may pop up at the last minute and assert that a debt has been underpaid or not paid at all.

How Legal Counsel Can Help

Certainly, when conflicts and challenges arise, you are going to need experienced legal counsel to help you through the situation. Even in the everyday process of administering the estate, it is wise to have an experienced attorney to whom you can turn to for answers on what you’re trying to accomplish. Administering an estate is not something that most people have experience in doing. 

When it comes to matters of estate administration, whether through a will or a trust, our trust and probate attorneys can help you through the process, or we can be more active and supervise the administration from start to finish. Either way, Davidson Estate Law stands ready to help you complete the process as smoothly, seamlessly, and timely as possible.

Reach out today if you’re facing the challenges of being an executor or trustee in or around Oakland, California, or in Walnut Creek, Berkeley, San Francisco, El Cerrito, Alameda, and throughout the Bay Area.