By Ryan Yuhnke
Becoming an executor can be stressful and challenging even if you have years of notice to prepare. If you are suddenly thrust into the role, you may find yourself with a number of overwhelming challenges you might not have expected. Here are the top 5 obstacles faced by executors and what you can do to reduce the stress.
1. Disputes With Co-Executors
If you find yourself in a co-executor situation, it can be challenging to navigate the division of responsibilities and make sure the estate is managed properly. This often happens when parents name more than one adult child as executor or if a court appoints multiple executors to oversee the disposition of the estate. You may find that your co-executors are out of state, which complicates their ability to fill out paperwork and secure assets. Or they may not have the financial or legal experience to navigate complex estate administration processes.
This challenge can be alleviated by appointing a professional fiduciary like a bank or corporate entity as the executor instead. If you are already in this situation, your co-executors could waive their position and allow you to manage the estate on your own. Conversely, all executors could decline the position and allow a corporate trustee to take over instead.
2. Disputes With Heirs
An executor’s job is to administer the assets of the estate in accordance with the deceased person’s will or other estate documents. This may become a challenge if the heirs are unaware of the terms of the estate or if they are unhappy with their share. Unfortunately, the executor can quickly become the bad guy when family tensions arise from divvying up the assets. Additionally, ongoing management of estate assets can create pressure on the executor to invest a certain way or achieve a certain return.
The best way to address these issues is to secure the assets as quickly as possible and inform the heirs of the terms of the will in a timely fashion. The sooner these tasks can be completed, the quicker you can assert your legal position as executor and ensure that the estate is handled properly.
3. Time-Consuming
Another major challenge an executor has to contend with is how time-consuming it is to properly administer the estate. Executors must find all the appropriate documents, apply for probate, contact both heirs and creditors, contact the Social Security Administration, secure the assets, manage the decedent’s property, transfer accounts, and file taxes. Acting as an executor is a very time-intensive job.
Partnering with professionals, like an estate attorney or a CPA, can help reduce the time drain, but it can be costly for the estate. Despite the additional cost, this may be a better option if you are not well versed in estate management or if you simply don’t have the time.
At CIS, we provide time-efficient resources for clients who suddenly find themselves in the executor role, especially when dealing with probate cases that contain securities with various brokerage firms or transfer agents. If you are worried about the time and effort it takes and don’t know where to start, we can help you navigate the process of getting all of the assets retitled and consolidated for ease of management. Our expertise in portfolio management can help you understand the positions you are now overseeing, the risks associated, and to team up together to manage the accounts as prudently as possible. We can also relieve you of the burden of managing accounts beyond the probate period, freeing up your time and reducing stress.
4. Personal Liability Exposure
Perhaps the biggest challenge of the executor position is the personal liability exposure that comes with the role. If you fail to pay the estate taxes, improperly value the estate, or distribute the assets inappropriately, you will be personally liable for the costs. Make sure you’re aware of the responsibilities that come with the role and act accordingly. Inform beneficiaries and heirs that you are not permitted to act outside of the best interest of the estate and that you can’t be swayed to distribute assets because the deceased “would have wanted it that way.”
An executor role must be handled with the utmost care and prudence to ensure you’re not on the hook for any missteps. At CIS, this is our specialty. We strive to be a fiduciary partner for our clients. We take on the task of validating the estate so that you can rest assured knowing that the process will be handled properly.
5. Out-of-Pocket Costs
As executor, you may have to pay for expenses out of pocket in order to properly administer the estate. In this case, you can be reimbursed after all tax obligations have been taken care of, but you have to be willing to front these costs in the meantime. Ensuring the estate has sufficient liquidity to cover expenses is a good way to avoid this issue. If there are expenses that must be paid out of pocket, make sure you keep thorough records in order to petition the court for reimbursement.
How We Can Help
As a specialized investment firm that works specifically with professional fiduciaries and court-appointed executors, Court Investment Services can help manage the challenges faced by newly appointed estate administrators. If you have suddenly found yourself in the executor role, or you are a family member working with a professional fiduciary and you would like help navigating your options, schedule an appointment by contacting us at (800) 880-2760 or Contact@CourtInvestmentServices.com.
About Ryan
Ryan Yuhnke is founder and Principal at Court Investment Services, an independent, fee-based investment firm that serves attorneys and fiduciaries as they manage estate-held assets. With two decades of experience, Ryan’s proactive, relationship-based process saves his clients time and money while putting them first in everything. He provides services and support to help attorneys and professional partners oversee and manage special-needs trusts, estates, conservatorships, guardianships, and other court accounts, including IRAs, 401(k)s, and all manner of retirement accounts that also fall under his clients’ management. Ryan is known for his commitment to excellence and transparency and his deep knowledge of probate laws, court compliance, and strategies to keep assets safe while abiding by all court and probate code directives. Ryan’s goal is to make his clients’ lives easier, providing investment support and education along the way.
Ryan has a bachelor’s degree in economics from the University of California, Irvine, and built his career working in banks, national investment firms, and registered investment advisory firms (RIAs.) Prior to starting CIS, he earned the title of First Vice President, and Portfolio Management Director while employed at Morgan Stanley in Newport Beach, CA. When he’s not working, Ryan can be found traveling and enjoying time with family and friends. This might include golf in the warmer months and snowboarding in the cooler months. To learn more about Ryan, connect with him on LinkedIn.
