At the death of the testator, the property included in the will comes under the authority and control of the executor. It is then his duty to carry out the provisions of the will. More than one executor may be named in the will. If an executor is unable to act, he may be released from his duties by formal declaration in writing. If an executor is deceased, or none of them is able to act, the court will appoint an administrator to carry out the necessary duties. The executor’s duties involve certain legal and accounting formalities – it is usual for the executor to engage a lawyer and a financial representative to act for him in these regards.
The first matters to be attended to are (1) probating the will and (2) paying the death duties, where applicable.
Probating the will means the proving of the execution and authenticity of the will with the courts. Once this is done, a Judge grants the letters of probate and then the executor can proceed with the distribution of the assets as outlined in the will.
No distribution of the estate may take place until the funeral arrangements have been assessed and paid. When the governmental departments have been satisfied in this respect, they will forward releases which permit bank accounts, etc., to be released to the custody of the executor for distribution.
The previous checklist may be of value in administering the estate. The list is by no means comprehensive. It should merely serve as a guideline to anyone involved in the task of administering an estate. Each particular estate situation will vary and new considerations will enter the picture. The number of items in this list and the complexity of many of the items will illustrate the value of legal and accounting assistance in the administration of an estate.
Sample Notice to Creditors:
NOTICE TO CREDITORS AND OTHERS
IN THE ESTATE OF JOHN ADAMS SMITH, late of (complete address) All persons having claims against the estate of JOHN ADAMS SMITH, late of (complete address) who died on or about the 1st day of June, 201_, are hereby required to send full particulars of such claims to the undersigned executor on or before the 28th day of July, 201_, after which date the estate’s assets will be distributed having regard only to claims that have been received and the undersigned will not be liable to any person of whose claim shall not then have notice.
MARY MATILDA SMITH (executor’s or personal rep’s name)
Fees of Executors, Lawyers, Financial Representatives
The executor and any solicitor retained to act for him or her in handling the estate are entitled to a fee from the assets of the estate. Each is entitled to be reimbursed for any money spent in performing his or her duties, as well, including the engaging of a financial representative to assist with the preparation and filing of applicable tax returns, etc.
A personal representative (executor) is generally entitled to a fee of 5% of the value of the estate. If the administration of the estate involves holding and investing assets over a period of years, he or she is entitled to 5% of the income earned by investment of estate assets. On occasion a further 2.5% of the value of that portion of the estate being held and invested is also allowed as additional compensation by way of a management fee.
These fees are allowed to the personal representatives as a group if there is more than one. It is up to the group to decide how the compensation should be split between/among them. The court will assist them if dispute arises.
The fees for normal legal services rendered by a solicitor in the administration of an estate will depend on the aggregate value of the estate. If you feel a lawyer is over-charging, it is always possible to have the account “taxed.” This is a legal proceeding whereby a court official confirms the fairness of the account or reduces it to an amount s/he feels reasonable. Legal fees may also be reviewed by the Surrogate Court judge at the time the personal representative puts the accounts before the judge for approval.
Fees to financial representatives for advice and assistance in the preparation and filing of requisite tax returns is normally based on the time required to be spent reviewing the legal, estate and tax documents and preparing the returns and dealing with estate assets, liabilities and taxation laws relating to each.
Hourly rates charged by all representatives should be determined by the Personal Representative (executor) so they may have a reasonable estimate of the cost for the various duties to be performed.