Being an Executor

Carlos was named executor in his father's will. He was the oldest of three siblings, lived in the same city as his parents, and was the most financially organized of the three. When his father passed in August 2024, Carlos stepped into the role on day three. His mother had pre-deceased his father by four years. So Carlos was handling everything alone, with his siblings (Sofia in Atlanta and Miguel in Boston) advising from a distance. Within the first month, Carlos made four mistakes that any first-time executor would recognize as understandable — and that an experienced estate attorney would recognize as significant exposure. MISTAKE 1: He paid his father's August mortgage payment from his own checking account because the bank had frozen his father's account pending probate paperwork. He told Sofia and Miguel he'd be reimbursed from the estate. The problem: this looked like commingling. Once probate was open, every transaction in or out of the estate had to flow through a dedicated estate account. The reimbursement to Carlos's personal account from the eventually-opened estate account looked, on paper, like the estate had paid Carlos personally — without documentation that this was a reimbursement. The fix: Carlos kept meticulous records — every receipt, every statement, every email about the payment. When the estate account was opened in September, Sofia and Miguel both formally acknowledged in writing that this was a reimbursement of a legitimate estate expense. The probate attorney structured the reimbursement as a documented expense rather than a distribution. No harm. But a different family or a different beneficiary could have challenged it. MISTAKE 2: He distributed personal property within the first 60 days. His father had a coin collection his father had often joked about leaving to Miguel because Miguel had been the one who collected coins with him in childhood. There was no written memorandum to that effect. Just family stories. In the second week, Carlos gave the coin collection to Miguel. "Dad would have wanted it that way." Sofia didn't object verbally. But six months later, during the estate's final accounting, the question of "who got what personal property and was it appraised" came up. The coin collection had a $14,000 appraised value. Sofia's third of that, had it been sold, would have been about $4,700. Sofia hadn't received any equivalent personal property. The estate had to retroactively credit Sofia $4,700 — which Carlos had to negotiate with Miguel (who had since told his wife the coins were a family heirloom). The fix: don't distribute personal property until you have a written memorandum or unanimous family agreement signed in writing. Personal property is where most family fights happen. It's not the big money. It's the principle. MISTAKE 3: He filed the probate petition without notifying creditors. Most states require the executor to publish a notice to creditors in a newspaper of general circulation. This starts a creditor-claim period (typically 4–6 months) during which any creditor of the deceased has to file a claim or lose the right to do so. Carlos's father had a small medical bill — $1,800 from a hospital stay six months before his death — that hadn't been billed yet because the hospital's billing system was slow. The notice to creditors went out properly. The hospital filed its claim 7 months later, after the creditor period had ended. Carlos paid the bill anyway, "to do the right thing." The fix: paying a time-barred creditor claim opens up two problems. First, the beneficiaries can challenge it (and Sofia did, mildly). Second, it sets a precedent — other potential creditors who missed the deadline might now expect payment. Carlos's attorney sent a polite "the creditor period has closed" letter to the hospital. The hospital wrote off the bill. Carlos and Sofia recovered their share of the $1,800 from Carlos's personal expense reimbursement to the estate. MISTAKE 4: He didn't keep his siblings informed in writing. For the first four months, all of Carlos's communication with Sofia and Miguel was by phone or text. He gave them updates as situations came up. He answered their questions in real time. What he didn't do: send a monthly written summary of every estate transaction. Account balances. Outstanding items. Decisions pending. In month 5, Sofia called Carlos and said: "I don't even know what's happening with the estate. I have no record of any of this. If something happened to you, none of this would make sense." The fix: Carlos started sending a monthly executor update email — every estate transaction with date, amount, and description; current balance of the estate account; outstanding items; decisions pending; documents attached. About 15 minutes of work per month. The conflict tension dropped immediately. A year later, the estate is closed. Total assets distributed to the three siblings: $623,000 each. Total disputes: zero. Total time Carlos spent on the executor role: about 180 hours over 14 months. Total fee Carlos took (he could have taken the statutory executor fee — about $18,000 in his state): nothing. He didn't take a fee. His siblings, two years later, both list Carlos as the executor of THEIR estates.

The single best protection an executor has — against creditor claims, IRS audit, beneficiary disputes, and personal liability — is contemporaneous documentation. Contemporaneous means written down at the time, not reconstructed later. The standard is: a reasonable executor, looking at your records, can tell what happened on any given day during the administration of the estate. The minimum documentation standard: 1. AN ESTATE BANK ACCOUNT LEDGER. Every deposit, every withdrawal, every check. Date. Amount. Description. Counterparty. Most executors use a basic spreadsheet. Some use a dedicated estate-administration software (clio.com, everplans.com). 2. RECEIPTS FOR EVERY EXPENSE. Either uploaded to a cloud folder organized by month, or stapled to a paper notebook. Receipts are the IRS's best friend on audit, and they're the beneficiary's best friend if anyone questions the executor. 3. MONTHLY UPDATE EMAILS TO BENEFICIARIES. Even if there's no conflict. Even if the beneficiaries don't respond. Even if the estate is simple. The email creates a written record that beneficiaries were informed. If anyone later claims surprise, you have receipts. 4. DECISION MEMOS FOR ANYTHING DISCRETIONARY. If you made a judgment call (which appraiser to hire, when to list the house, how to handle a creditor claim), write a paragraph explaining the decision. Date it. Save it. If anyone ever questions the decision, you have your reasoning preserved. 5. CORRESPONDENCE FILES BY COUNTERPARTY. One folder per institution (the deceased's bank, brokerage, life insurance company, etc.). Every email, every letter, every phone-call note in that folder. Most executors discover that the same institution will tell them three different things over the course of six months. Documentation prevents the "but you told me last month that..." argument. The personal-liability angle most executors miss: in most states, an executor can be held PERSONALLY liable for breach of fiduciary duty. This includes failing to act prudently, failing to keep beneficiaries informed, commingling estate funds with personal funds, and self-dealing. Most executor-liability lawsuits start with a beneficiary asking "what happened to X?" and the executor not being able to give a clean answer. The beneficiary, frustrated, hires an attorney. The attorney sends a demand letter. The estate's accounting falls apart. The executor settles for substantially more than the disputed item was worth, plus attorney fees. The cure for all of this is documentation. Spend the 15 minutes per week. The first time you save yourself from a beneficiary dispute, you'll thank yourself.