When my grandmother passed away, she left us a simple estate. Yet even as a trained financial advisor, I was surprised by how complex the administration process was.
Estate executors are tasked with managing the deceased’s estate, which includes notifying beneficiaries, settling debts, and distributing assets according to the will. This role is both a legal obligation and a fiduciary duty, requiring careful attention to detail and considerable time.
A Multifaceted Role
Navigating the labyrinth of legal and financial requirements includes everything from filing paperwork with probate courts to managing and liquidating assets. Oftentimes, the executor is also a beneficiary of the estate, and filling this dual role presents unique challenges. For example, an individual wearing both hats will have to distribute the decedent’s assets according to the will and they may have to mediate disputes that arise among other beneficiaries.
This dual role can also raise questions about conflicts of interest. Therefore, an executor who is also a beneficiary must be extra vigilant in maintaining transparency and be communicative. They should consider:
Keeping detailed records of all decisions, transactions and accounting,
Regularly communicating with all beneficiaries about the estate’s status.
Seeking professional financial advice for complex decisions or valuations.
Appointing a neutral third party for particularly contentious issues.
By taking these steps, executor-beneficiaries can help mitigate potential conflicts or even the perception of conflicts to maintain family harmony during a difficult time.
In my experience as a financial advisor and trust and estate industry professional, the first thing that individuals named as executors typically do is search online for how to handle their role and what tasks they need to accomplish to settle the estate. While the lucky ones may have access to professional advice, most executors must rely on the outdated and incomplete resources available on the Internet, such as generic checklists. These checklists often fall short of addressing the specific requirements of each estate.
First-time executors need a roadmap — a customized checklist that guides them through their newly acquired role and ensures they are adequately fulfilling their duties. This roadmap should account for the unique aspects of the estate, such as the types of assets involved and the deceased’s occupation.
Business-Owners and Professionals: Special Considerations
For example, liquidating a business owner’s estate can be significantly more complex than settling an estate primarily consisting of retirement accounts. Consider the case of a retail store owner: The guardian must grapple with inventory valuation and liquidation, handle lease agreements or property sales, settle accounts with suppliers and customers, and manage employee-related matters such as final paychecks and benefits.
The complexity multiplies when dealing with a professional practice like a doctor or lawyer. In these scenarios, the guardian must navigate the intricate landscape of client or patient confidentiality, management of sensitive records, and the crucial decisions about transitioning or closing the practice. They may need to value and potentially sell the practice, all while handling ongoing cases or ensuring continuity of patient care.
The Benefits of a Specific Roadmap
Without a tailored roadmap, executors are left searching for more specific guidance. This can increase the risk of errors and conflicts. Each estate is unique and requires a flexible workflow to adapt to specific circumstances. By leveraging technology, particularly AI, it is now possible to create detailed, customized checklists to guide executors through their duties. These checklists can be tailored to the unique circumstances of each estate, ensuring that all legal and procedural requirements are met. It also helps alleviate the burden on those executor-beneficiaries by increasing transparency about the tasks ahead.
This streamlines the process and provides executors with the confidence and peace of mind that they are fulfilling their duties correctly while saving precious time better spent with family or caring for oneself.
Not One-Size-Fits-All
Personalized checklists generated through AI can consider various factors, such as the deceased’s financial situation, personal wishes and specific legal requirements. For example, the deceased might have conditions placed on certain beneficiaries or assets before they are distributed. A tailored approach ensures that executors receive relevant and precise guidance, unlike the one-size-fits-all checklists commonly found. Innovations like this transform a traditionally cumbersome process into a more manageable one, providing executors with clear, actionable steps.
While the role of an executor will always have its challenges, modern tools, and technologies can make the process significantly easier. By adopting a personalized, legally compliant approach, executors can navigate their responsibilities more efficiently and less stressfully. As the estate settlement process evolves, embracing innovative solutions like AI-generated task lists will be crucial in supporting executors through this demanding role.
Ari Brojde is the co-founder and CEO of Estateably, an estate, trust and incapacity accounting and administration software used by over 1,000 firms across North America. He holds a Certificate in Trust and Estate Administration from the Society of Trust and Estate Practitioners (Canada) and is an executor advisor designate of the Canadian Institute of Certified Executor Advisors.
