Managing Estate Assets as Executor

Categories: Probate

If you have been named as an Executor (or Executrix, if female) of an estate, it may seem on the one hand a great honor and on the other an overwhelming responsibility. It is your job as the individual named in a person’s Will to settle the decedent’s estate. The decedent placed a great deal of trust and confidence in you to handle his or her affairs after death with care and according to the instructions in the Will. Most individuals will need the guidance of a probate attorney to help them through this process. In this article we will generally discuss probate administration and the executor’s duties in managing the estate. A probate attorney such as Austin probate lawyer Farren Smith can help you with the steps you need to take to properly manage the estate assets as an executor.

Probate Process in Texas

As we have discussed in other articles, probate is essentially proving a Will in order to wind up the business affairs of a person who has passed away and distribute the estate. The probate process is handled in court, usually in the county where the decedent lived. For example, if the decedent lived in Pflugerville, the probate should be brought in a Travis County court.

Often the person filing the application to begin the probate process is the person named as the executor in the Will, or a Texas attorney on his behalf. After a probate hearing before a judge to prove up the Will, the judge issues orders regarding probating the Will and naming the Executor to handle the administration under the court’s direction. The Executor must take an oath to perform his duties, and may have to post a bond (insuring that he will meet his responsibilities under the law). The court then issues official Letters Testamentary to the Executor giving him authority to settle the estate and directions to administer and distribute the decedent’s assets among beneficiaries, creditors and any others who have an interest in the property.

In a nutshell, the executor’s duties in administrating the estate include:

  • gathering the assets of the person who died (“decedent”);
  • paying his or her debts; and
  • distributing the remaining assets to those entitled to them under the terms of the Will.

Independent Administration

Fortunately, in Texas a person can designate in their Will that their estate be managed under an independent administration which has little or no court involvement or supervision. In contrast, a dependent administration requires a great deal of court intervention, time and cost. Many people state in their Wills that they want an independent administration, and appoint an independent executor to manage their estate, without bond.

Notices and Filings

The independent executor will need to file several notices to creditors and beneficiaries within the time outlined by statute, as well as an affidavit that the notices were given. He will also have to file with the court an inventory and appraisement and list of claims, or affidavit in lieu of inventory. As an independent executor, it is generally wise to retain the services of a probate attorney to assist in preparing these documents.

Managing Estate Assets

One of the primary responsibilities of the independent executor is to locate and manage the assets of the decedent. Upon qualification as an independent executor, it is your duty to take possession of all property belonging to the decedent. To ensure that you locate all of the assets, you will need to obtain items such as:

  • bank records
  • checkbooks and cancelled checks
  • income tax returns
  • insurance and annuity policies
  • deeds
  • titles to property
  • business records
  • safety deposit box keys and contents
  • other pertinent financial statements.

Any cash that you collect should be maintained in a bank account separate from your personal funds, and never co-mingled with your own property. The decedent’s bank accounts and cash can be consolidated and placed in an estate checking account, preferably one that requires a low minimum balance with low fees. You may consider an interest-bearing money market account for larger sums as holding money/funds in non-interest bearing accounts for long periods of time could subject you to potential liability. The estate account(s) should be opened with a name such as “Estate of Hazel Christian, Deceased”.

Once the assets are located then it is the executor’s duty to make sure the estate assets are valued, preserved and managed in a prudent manner. Preservation of the assets means to prevent the destruction or devaluation through deterioration. For example, a vehicle should be kept locked and left in a manner to minimize the potential for burglary or vandalism.

Managing the assets also includes appraising and selling real estate, and valuing and selling publicly traded securities such as stocks and bonds. If the decedent had a business interest then it is important to retain the services of legal counsel and possibly a CPA as the distribution of closely-held business interests can be especially difficult.

Assets such as vehicles, jewelry and other important tangible items should be appraised and then sold for fair market value. A detailed list of all liquidated assets should be kept and reported to your estate attorney.

It is advisable to hire an attorney to help with the probate process and with questions as you are managing the assets. If you have questions about estate administration or managing assets of an estate, please contact Austin probate attorney Farren Smith for a consultation.

Sources

  • Tex. Estates Code