For the testator who created the estate plan, the assets they left behind for specific beneficiaries may have been their main focus. It is common for people to put a lot of consideration into what they want their loved ones to inherit. They may choose beneficiaries for certain assets based on the emotional history they have with that person, which will make the inheritance all the more meaningful.
As the representative or executor of an estate, you do not usually have control over what assets someone inherits, but you do get to be the one to distribute that inheritance. It can be very rewarding after months of hearings, formal notices and frustrating phone calls with utility companies to see people actually benefiting from all of that hard work.
Property distribution is often one of the final stages in the estate administration process. Executors will still need to protect themselves when distributing those assets to avoid litigation or financial losses in the future. How do you protect yourself when distributing the assets from an estate to the intended beneficiaries?
1. Make sure you have fulfilled your obligations
You need to review the estate plan very carefully to ensure you follow the exact instructions left by the testator. Careful adherence to provided instructions will help you avoid claims that you have improperly managed the estate.
You could also have personal liability for certain debts and taxes if you distribute resources from the estate without first paying their obligations in full. Ensuring that you have provided the appropriate creditor notice required under state law and made all of the necessary payments before distributing assets to beneficiaries will limit your personal liability and potential financial responsibility over debts.
2. Keep records of your actions
Just like you need receipts for your payments to creditors and any other significant use of estate assets, so too do you need to carefully document the distribution of estate assets to beneficiaries. Having people sign receipts affirming that they have received specific assets is important.
You will also need to keep an accurate inventory of estate assets. That way, you can appropriately respond to people who may try to accuse you of misappropriating or improperly distributing the assets from the estate.
Taking the necessary steps to limit your personal risk will be key to your protection during the estate administration process.