Dealing with Heirs

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Executor at Sunset

Regardless of whether you are a member of a close-knit family of heirs, or a professional lawyer who didn't previously know any of the heirs, the executor role can encounter some sensitive dynamics.

Keep Heirs Informed

While the executor has little legal obligation to coordinate and cooperate with heirs, it's best practice to keep them informed of the overall situation, expected timelines, major decisions, asset distribution allocations, and the like.

Certainly, there are exceptions to this rule, and no matter what you do, some situations will be stressful, but often rifts develop between the heirs and the executor when the heirs don't know what is happening, and start to imagine the worst. Sometimes these rifts can permanently damage important family relationships (stories abound of relatives who stopped speaking to one another for years), and sometimes these situations can even escalate into full-fledged lawsuits.

EstateExec can help you keep heirs informed, first by organizing things so that you yourself understand and can concisely communicate the situation, and second, by making it possible for you to offer heirs direct visibility into estate status. The Estate Actions button in the top right of the Overview tab enables you to give read-only (or even full edit) access to anyone you choose: they can directly see what's going on, and the transparency goes a long ways towards keeping things calm. See Share Access for instructions.

You may also want to consider sending heirs a link to EstateExec's Guide for Heirs.

Optimize Asset Distributions

The will may contain specific bequests that an executor is obligated to try to honour, but beyond that, the executor has significant freedom in dealing with estate assets. Often you may have to sell some assets to pay off estate debts, or you may choose to sell assets simply to make it easier to distribute the proceeds. When it comes time to distribute specific assets, you have considerable leeway in deciding who gets what, as long as total value distributed matches the amounts or percentages specified by the will or the court.

Unsurprisingly, heirs often have preferences and opinions about these decisions. While you are not required to act according to these preferences, it's nicer for everyone if you can do so (within reason). For example, if Rose really wants the antique silver place settings, and Jonathan wants the coin collection, it's best to divvy things up that way. If Rose has her heart set on Mom's diamond engagement ring, it's best to sell something else if you need to raise cash to pay off a debt.

Discount $$:  EstateExec users qualify for significant discounts using FairSplit, online software that helps executors and heirs equitably decide how to divvy up assets so that everyone is happy and feels treated fairly (see Task: Get asset allocation inputs from heirs).

Early Distributions

It's common for heirs to want to receive their distributions as soon as possibly, but as an executor, you have a fiduciary responsibility to follow a certain process to ensure that all estate obligations can be met, and that the funds ultimately flow to the correct people and organizations (see Making Distributions). Consequently, distributions usually occur at the very end of the settlement process, sometimes taking years to occur (see Estate Settlement Statistics).

An executor is under no obligation to make early distributions, and in fact best practice is not to do so. That being said, an executor may sometimes decide that circumstances warrant an early distribution, although such a distribution does expose the executor, the estate, and even the heir to a certain amount of risk. And of course, if the estate is undergoing probate, you will have to get the probate judge to agree.

If an heir really wants an early distribution, you may instead want to make him or her aware of the existence of firms that specialize in providing inheritance advances. These firms charge a significant percentage of the eventual inheritance, but in some cases, it's worth it to an heir who really needs or wants the money quickly. See Heir Guide: Financials (Advances section).

Legal Protections

As long as you act reasonably and honor your fiduciary duty, you are fairly safe from personal lawsuits. However, disgruntled heirs do sometimes sue the estate, and so it is in your best interest to keep the heirs as happy as reasonably possible (this statement is not meant to encourage early distributions, however).

Having a lawyer assist you with the executor process can be very helpful, as the lawyer can authoritatively explain complex situations, present bad news, or simply serve as a buffer between you and any contentious issues. The lawyer can also help ensure you don't violate any laws during the process.

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