Top 5 Mistakes Executors Must Avoid

Being an executor isn’t easy. There’s plenty of paperwork to be done, lots of interaction with government agencies, registries and lawyers. There are always beneficiaries putting on pressure to do things more quickly. And if all of that weren’t tough enough, an executor risks personal liability for any mistakes he or she makes.

It’s not surprising that executors make mistakes. In the interest of informing present and future executors, here is a look at the top five mistakes executors make:

  1. Ignoring the Will

Executors frequently feel that they have a better, or “more fair” idea of how an estate should be distributed than is directed by the Will. However, it’s not their choice. Their job is to distribute the estate according to the Will, not to re-write it.

According to Kevin Loberg, a reputable name in for sale and purchase of Toronto luxury homes, an executor might be less tempted to change the distribution if he or she kept in mind that for every person who likes the new distribution, there is at least one person who is outraged by it. If the executor fails to follow the distribution under the Will, he or she may be responsible for paying the disappointed beneficiary out of his or her own personal funds.

  1. Keeping Secrets

Executors are often secretive to the point of being furtive. Nothing is going to fuel speculation and suspicion on the part of beneficiaries more than being kept in the dark. An executor must respond to reasonable enquiries from the residuary beneficiaries of an estate. They are entitled to it, and responsible for policing the actions of the executor. They are entitled to see the Will and all of the documentation filed with the court.

  1. Treating Estate Money as their Own

Perhaps this is the reason for the secrecy mentioned above, but many executors either don’t know or ignore the limits of their role. Executors have been known to pay off their own debts, make loans to family members and buy into business ventures, all with estate funds. None of this is lawful, and executors may be forced to repay those funds out of their own money.

  1. Failing to deal with debts and taxes

By law, debts of an estate, including tax liability, must be paid before beneficiaries receive their shares. It isn’t easy to resist the pressure from those who want their money now, but an executor who pays beneficiaries without having cleared all debts and liabilities may be personally responsible for paying those debts.

  1. Trying to Keep Costs low

“Keeping costs low” seems to translate into forgoing professional help in many cases.

  • They try to do tax returns without the help of an accountant, which means they miss eligible deductions and elections.
  • They also miss filing deadlines, and so incur interest.
  • They try to sellluxury Toronto homes without a realtor and settle legal disputes without a lawyer.
  • They sell assets without appraisals and invest money with no guidance.

Very few people can do all of these things well, particularly at the same time as keeping their full-time job and family going.

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